VAT will be imposed in Oman at the standard rate of 5% in accordance with the GCC VAT Agreement effective from 16 April 2021, making Oman the fourth GCC country to implement VAT after the United Arab Emirates ("UAE"), Kingdom of Saudi Arabia ("KSA") and Bahrain.
The introduction of VAT will impact all departments across the whole business, and will therefore need time to be managed and completed in an effective way. It is therefore imperative that businesses commence their VAT readiness projects at the earliest opportunity – in particular, to avoid the significant and unnecessary penalties that we have been seeing businesses in other GCC states incurring under the respective VAT regimes for non-compliance over the last two years.
Businesses whose taxable supplies’ value exceeds the mandatory threshold will need to register for VAT with the Oman Tax Authority (OTA). Mandatory Threshold limit for businesses liable to register is 38,500 OMR.
Below is the list issued by Oman Tax Authority on timelines for Vat Registration are summarized below
| Category | Annual Taxable Supplies(OMR) From | Annual Taxable Supplies (OMR) upto | Mandatory registration Guidelines | Effective date of Vat |
|---|---|---|---|---|
| 1 | 1000,000 | 1000,000 | 1 Feb 2021 to 15th March 2021 | 16th April, 2021 |
| 2 | 500,000 | 999,999 | 1st Apr 2021 to 31st May 2021 | 1st July, 2021 |
| 3 | 250,000 | 499,999 | 1st July 2021 to 31st August 2021 | 1st Oct 2021 |
| 4 | 38500 | 249,999 | 1st Dec 2021 to 28th Feb 2022 | 1st April 2022 |
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