June 23, 2023
Oman introduced a value-added tax (VAT) on April 16, 2021, making it the fourth member of the Gulf Cooperation Council (GCC) to introduce this tax. Oman has undergone a tremendous transformation with the introduction of a value-added tax (VAT). As of October 18, 2020, the Sultanate of Oman Tax Authority published the VAT law in its official gazette. Businesses must register and comply with tax rules. Accoxi is cloud-based accounting software where you can save all your accounting data. Here we discuss Oman's VAT rate, VAT registration, VAT returns, VAT penalties, VAT refunds, VAT records, and the limitation period of the VAT law.
Oman's standard VAT rate is 5%, implemented by the Sultanate of Oman Tax Authority. VAT rates are classified as standard rate, zero rate, and exempt rate.
5% on all goods and services
The zero rate VAT is charged at 0%, and taxpayers can claim input tax for exporting goods and services outside Oman, international transportation services, and basic food items.
The exempted VAT rate that does not charge VAT and cannot be claimed for VAT. Exports, certain financial services, and basic foodstuffs are among the supplies that will not be taxed at all or be exempt from taxation
In Oman, businesses must register for VAT if their annual taxable turnover exceeds OMR 38,500. Above OMR 19,250, voluntary registration is possible. Regardless of the threshold, non-resident businesses that provide taxable supplies must register for VAT. Businesses can apply for VAT registration through an online portal or an application form.
When registering for VAT, you must enter all the relevant information accurately. Accoxi, helps you protect all your accounting transactions with data backups. Here are some important points to check before submitting for VAT registration.:
VAT-registered businesses must submit a VAT return and submit VAT to the Sultanate of Oman Tax Authority. A VAT return is a document filed with the taxation authorities indicating the amount of taxes to be paid or refunded to the government. VAT returns are due 30 days after the quarter ends.
VAT return and payment will be extended if the next working day is a holiday or weekend. If the VAT payment is late, you must pay an additional 1% each month.
The Sultanate of Oman's tax authorities penalize and fine taxpayers who violate VAT laws and rules. Here are some VAT penalties and fines:
The nature of the offense
Penalty or a fine
OMR 500 and OMR 5,000
Between OMR 1,000 and OMR 10,000
1% to 25% of the difference between the stated and actual tax due
|300 % of Fraudulent tax evasion
Oman charges a tax on goods and services called VAT (value-added tax). The Omani government has set up a system for refunding VAT to businesses doing business there to make it easier to pay the tax. If certain conditions are met, this system enables businesses to claim back the VAT they paid. The only step to getting a refund is sending the necessary paperwork to the appropriate authorities. These authorities will then determine whether they are eligible for one. Businesses operating in Oman need to know about this procedure because it can help them save money by getting back the tax they paid.
Businesses registered for VAT in Oman are required to keep the relevant records for ten years after the relevant VAT period ends. However, real estate businesses are required to maintain records for fifteen years following the conclusion of the relevant VAT period. The following records must be kept:
According to the Oman VAT Law, the Oman tax authority cannot access tax after five years from the tax due date. The tax due date will be extended to the next ten years if registration is not done within the time limit.
Therefore, it is important for businesses planning to start a business in Oman to ensure that they follow VAT regulations and rules. In conclusion, Oman’s implementation of the value-added tax (VAT) is a significant step towards increasing revenue generation and building a more sustainable economy. With Accoxi, you can quickly register for Oman VAT as it is integrated with Oman's VAT rates, making it simple to start a business.