Oman VAT compliance: Second phase registration deadline looms

Oman’s VAT laws came into effect in April 2021. The new VAT regulations apply 5% VAT to goods and services traded in Oman. 

However, not all companies are thus far required to register for VAT in Oman. The Sultanate is applying a phased approach to registration. Businesses that generated revenue in excess of 1 million OMR had to register for VAT prior to the April implementation.

The second phase is currently in effect. Businesses that generate revenue between 500 000 OMR and 1 million OMR must register for VAT by 31 May 2021. Registration for those businesses will come into effect on 1 July 2021.

In all, there are four phases scheduled. 

Nonresident companies take note

Note, however, that there is no threshold for nonresident businesses. Nonresident businesses operating in Oman must register for VAT. In addition, nonresident companies need to appoint a resident person to manage their VAT.

Zero rated goods

Oman has seen a modest, and expected, rise in inflation since implementing VAT. However, Oman’s VAT rate is low by international standards. In addition, many goods and services are zero rated. For example, medicines, healthcare, education and certain food items are exempt from VAT.

Archiving and compliance

Oman’s tax regulations require businesses to implement effective storage and record keeping, ensuring accounting records are kept up to date. 

Companies must also store tax invoices, customs documents and other documentation.

VAT IT is available to provide assistance, insight and world-class VAT invoicing solutions.