Oman Guide: VAT Registration in Oman: Portal Guidelines

VAT in Oman
VAT law in Oman

Businesses are now beginning to register for VAT in Oman, following the enactment of the VAT law by Royal Decree No. 121/2020 on the 18th of October. The VAT law implementation date is on the 16th of April, 2021, that is, six months from the announcement date. In this article, we will explore the scope of VAT registration in Oman, portal guidelines and everything you need to know. Let’s define the basics!

What Is VAT in Oman?

VAT means Value Added Tax. It refers to goods and services tax in some countries. It is a consumption tax levied on a product every time value is added at any stage of the supply chain.

Remember that tax is an obligation of citizens to pay a particular amount of money (from their income/earnings) to the government to run its operations.

Why Did Oman Introduce VAT?

Oman Introduced VAT for the government to raise revenue outside revenue from hydrocarbons.The standard VAT rate in Oman is just 5%, making Oman one of the countries in the world with the lowest VAT rates.

The idea of fixing such a low rate by the government is to show consideration to  businesses in view of the impact of COVID-19 on such businesses.

What does VAT in Oman cover?

The VAT covers all supply of goods and services but there are exceptions. Certain business categories are exempted from VAT in Oman and they include;

  • The supply of educational services and related goods and services.
  • Residential buildings by renting
  • Peer land
  • Preventive and healthcare services in Oman
  • Supplies for non-profitable charitable societies
  • Returned imported goods
  • Financial services
  • Local transportation
  • Resale of residential buildings
  • Goods and services for military services
  • Diplomatic international institutions.

Zero-rated categories are also part of the exceptions to the VAT rate in Oman. These categories include;

  • Natural gas
  • Crude oil
  • Oil derivatives
  • Investment gold
  • Export goods and services
  • Medicine
  • Certain food items
  • Means of transport

Why You Should Undergo VAT Registration in Oman?

The reason for the enactment of  VAT laws is not to put the citizens of the country in any form of difficulty, or to exploit any business, but to impact the country positively, both economically and socially. VAT will help strengthen the financial position of Oman, making them able to provide improved public services and more infrastructure with the VAT payable by their citizens.The international competitiveness levels of the country will also be impacted positively.

VAT Registration Portal in Oman: The Registration Process

VAT Registration Portal in OmanBusinesses not under exemption or zero-based categories, whose taxable supplies pass the mandatory threshold, are expected to register for VAT with OTA (Oman Tax Authority) before the deadline.

Start-up businesses with low turnover can register, using the voluntary registration option.

An online registration portal has been provided for businesses to register for VAT.

People who have a CRN(Commercial Registration Number) can register through the portal but those without CRN have to access the Tax Authority’s website, fill the form there and send it by email.

Here is the simple way one can register through the online portal:

  • Login to the Portal
  • The first thing to do after you have been logged in to the portal is to click on ‘Taxpayer Registration’.

This will take you to the next page where you are required to insert your commercial registration number, after which you click ‘register’.

Note that only the authorised signatory of the taxpayer can register the taxpayer.

  • After the previous stage, ‘Taxpayer Registration’ window will appear. Select ‘Value Added Tax Liability Registration’ among the options that appear from ‘Type of Registration’ drop-down list.
  • Move on to the next stage by clicking the ‘continue’ button.

‘New Registration of VAT Liability’ form will come up if the above process is successful. You would have to fill the required fields with accurate information.

  • Next, select the ‘Add new activity’ button to classify activity as main or to create room for more activities. ‘Activity’ window will show on the system.

You are to tick the ‘Main Activity’ box and fill the required fields which are ‘Activity’ and ‘Date of Commencement of Activity’. Round off this section by clicking the ‘Add and Close’ button.

  • The next stage is to fill the form in the ‘Application for the Tax Registration Number’ window that comes up. Submit the form by selecting the ‘Save Draft’ button below the form.

This stage is very important as the Tax Authority will not take any action if this form is not submitted.

You are also required to add the necessary attachments by selecting ‘Attachment’, after which you are to click the ‘Add New Attachment’ button.

In the ‘Add Attachment’ window, click the ‘Save and Close’ button after you must have filled the fields with the required information.

  • Proceed to click on the ‘Submit’ button that is found in the Application form tab. At this point, you can then print.

Click the ‘Print Decision’ button. Then, from the E-services page, select ‘Print VAT Certificate’.

Penalties For Non-compliance to VAT Registration in Oman

It would be wise if citizens took the VAT law in Oman and registration seriously as there are certain penalties that businesses who do not adhere to the new VAT law would suffer.

Below are some penalties with their associated act of non-compliance.

#1. Two months to one year imprisonment and a fine of OMR 1,000-10,000

  • Issuing wrong data/information in refund application.
  • Refusal to submit any document required by authority
  • Issuing wrong tax invoice
  • Not abiding by the provisions of VAT laws.

#2. One to three years imprisonment and a fine of OMR 5,000-20,000

  • Failure to register within the stipulated time
  • Provision of wrong data/information
  • Evading tax payments
  • Concealing or destroying records within one year of receipt of notice.

Conclusion: VAT Registration Portal in Oman

While undergoing VAT registration, it would interest you to know that the impact of VAT on cost of living in Oman will be mild, since the VAT rate is low in comparison to other countries of the world.

Therefore, the impact will be limited on the costs of goods and services.

Note also, that the healthcare, financial services and education sectors which are basic for life have no VAT implication.

There is nothing to worry about at all. Only ensure that you carry out your VAT registration in time.
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