News Update

Zero VAT for transportation of goods and services in Oman’s special zones

Date: 04 May, 2021

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External URL: https://opaz.gov.om/en/news/2021/sezad-and-free-zones-in-salalah-sohar-and-al-mazunah-are-classified-special-zones

Muscat- May 5, 2021:

SEZAD and free zones in Salalah , Sohar, and Al Mazunah are classified as Special Zones and the supply and transportation of goods and services are zero-rated of VAT.

The Public Authority for Special Economic Zones and Free Zones ( OPAZ ) said, ‘The Special Economic Zone at Duqm ( SEZAD ) and the free zones in Salalah , Sohar and Al Mazunah are classified as Special Zones in accordance with the provisions of Article ( 102 ) of the Executive Regulations of the Value Added Tax ( VAT ), issued in the Decision No ( 2021/53 ). This announcement comes post the coordination with the Tax Authority in regards to the implementation of VAT.’

In accordance with the conditions specified in the Article ( 103 ) of the regulations, all these special zones are subject to 0 % tax.

Therefore, OPAZ calls on all companies, enterprises, businesses and establishments operating in these zones to comply with the conditions stipulated in the VAT Executive Regulations, until the Tax Authority of Oman publishes detailed procedures for the purposes of applying VAT at a rate of zero percent in the Special Zones. These conditions include VAT Registration and VAT Administration.

Oman: Companies require certificate to collect VAT from customers

Date: 26 Apr, 2021

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External URL: https://timesofoman.com/article/100566-companies-require-certificate-to-collect-vat-from-customers-in-oman

Muscat- April 26, 2021:

All companies in Oman need to have a certificate of registration from the Tax Authority before charging customers value added tax (VAT) for goods and services. Those who do add the 5 percent VAT charge to customers without this certificate would be subject to penalties under the law.

According to an official at the organization, this is for all commercial enterprises including SMEs that offer goods or services subject to VAT. If owners of establishments that are not registered with the authority purchase goods from suppliers who have imposed VAT on them, they must retain all of the invoices of goods received, inclusive of VAT prices. The business must then register with the Tax Authority to obtain the registration certificate and commit to submitting tax declarations on time added the official.

VAT at the rate of 5 percent came into effect in Oman on April 16, 2021. The first round for companies to register for VAT took place between February 1 and March 15, 2021.

Although this period has elapsed, companies are required to register themselves in the second duration- April 1 to May 31, 2021.

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Complete VAT guidance on the tax portal of Sultanate of Oman

Date: 25 Apr, 2021

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External URL: https://tms.taxoman.gov.om/portal/vat-tax

Muscat- April 25, 2021:

Oman Tax Authority has released guides on online registration and a list of most asked questions on VAT on their portal.

VAT Law

  • VAT Law Translation

VAT Regulations

  • VAT Regulation unofficial english version

Registration Forms

  • VAT Registration Application – For Resident no CRN
  • VAT Registration Application – For Non Resident

Manual Guides and FAQ’s

  • VAT – Individuals – FAQ
  • Information Sheet
  • VAT – Business – FAQ
  • Determining Food Items subject to Value Added Tax at Zero Rate
  • Determining the Mandatory and Voluntary Registration Thresholds
  • Determining the VAT Registration due Dates and Effective Dates
  • VAT Transitional Registration Guide
  • VAT Registration Manual Guide – Persons with CRN
  • Guide on VAT Non Resident Application

Click here to view the guides.

Oman: Zero VAT on 488 food items

Date: 12 Apr, 2021

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External URL: https://timesofoman.com/article/zero-vat-on-488-food-items-in-oman

Muscat – April 12, 2021:

Nearly 500 food products commonly used by people in Oman will be subject to zero taxation under the Value Added Tax, once it comes into effect.

The measure is part of the Social Security Scheme issued by His Majesty Sultan Haitham Bin Tarik, and developed by the Ministry of Commerce, Industry, and Investment Promotion, in association with other government bodies.

Under the scheme, the number of basic food commodities charged a zero rate VAT will be increased to 488 from 93.

Furthermore, all VAT charges related to electricity consumption for citizens who have up to two residential category subscriptions will be paid by the government. VAT is expected to come into effect across the country on April 16.

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Oman: Few medicines, medical equipment exempted from VAT

Date: 05 Apr, 2021

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External URL: https://www.omanobserver.om/some-medicines-medical-equipment-exempted-from-vat/

Muscat- April 4, 2021:

The Head of the Tax Authority has issued decision 57/2021 that outlines certain medicines and medical equipment would be subject to value-added tax (VAT) at zero rate. Based on VAT Law promulgated by Royal Decree and based on the requirements of the public interest, it was decided:

Article 1:

Supplies of medicines, herbal medicines, biological preparations, health (hygienic) preparations, food for medical use and medical equipment are subject to value-added tax at zero rates provided a release permit is issued by the Ministry of Health in accordance with the customs code.

Article 2:

This decision shall be published in the Official Gazette and be enforced from April 16, 2021.

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Oman's Tax Authority slams income tax application rumours on social media

Date: 31 Mar, 2021

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External URL: https://timesofoman.com/article/tax-authority-slams-social-media-rumours

Muscat- March 31, 2021:

The Tax Authority in Oman has denied the application of income tax for individuals starting from 2022 and has clarified that it is a rumour being circulated on social media.

Further, Oman’s Tax Authority in a statement issued online confirms that no official statement or decision has been issued in this regard. The matter is still under study according to what is announced in the medium-term fiscal balance plan. Therefore we note to verify the source of the information through official communication channels.

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Oman: Violators of VAT to face strict penalties

Date: 28 Mar, 2021

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External URL: https://timesofoman.com/article/violators-of-vat-to-face-strict-penalties-in-oman

Muscat- March 28, 2021:

Oman has drafted a series of strict penalties for violators of VAT due to be effective from April 16, 2021.

The Tax Authority mentioned the penalties stipulated are imprisonment for a period of not less than two months, or a fine that is not less than OMR1,000. The maximum penalties can reach imprisonment for three years and a fine that does not exceed OMR20,000. In the event of recurrence, the court may double the fine and increase the maximum penalty for imprisonment by more than half of this limit.

In the event of delay in tax payment, the law imposes a rate of 1 % of the value of the unpaid tax for each month of delay, starting from the end of the specified period for payment and up to the date of payment.

The law has mentioned 17 cases in Articles 100 and 101, and it includes cases of wilful failure to implement some of its provisions, cases of providing incorrect data or documents, and cases of doing what would hinder the employees of the Tax Authority or who are required to carry out their duties.

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Oman to slash income tax on SMEs and offer investors long-term residency permits

Date: 15 Mar, 2021

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External URL: https://www.arabnews.com/node/1822606/business-economy

Muscat- March 15, 2021:

Oman plans to cut income tax for small and medium businesses for 2020 and 2021 and will offer long-term residency permits for foreign investors. The plans are part of Oman’s Vision 2040 aimed at diversifying the economy away from oil, which makes up the bulk of state revenues.

Oman is one of the Gulf’s weakest economies and was badly hit by the coronavirus pandemic and low oil prices. The International Monetary Fund revealed its economy likely shrank 6.4 percent in 2020 and anticipates to make a modest recovery to 1.8 percent growth this year.

The measures also include income tax being reduced for companies in sectors aimed at economic diversification that will begin operating this year. Oman will also cut rent at the Duqm Special Economic Zone and industrial areas until the end of 2022.

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Oman:Tally launches VAT ready software 'TallyPrime'

Date: 14 Mar, 2021

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External URL: https://www.tahawultech.com/news/tally-solutions-launches-its-vat-ready-software-tallyprime/

Muscat- March 14, 2021:

Tally Solutions, the leading international business management software provider launched a Value Added Tax (VAT) software, TallyPrime Release 1.1.3 to assist the Oman business owners towards an easy transition to the new tax regime.

While TallyPrime will enable businesses to set-up the software quickly and record and print VAT bills in Arabic and English with ease, it will also allow them to start their VAT compliance journey from day one. The software’s unique in-built error detection and correction capability ensures accurate data, so businesses always remain compliant.

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Oman: VAT due on unsold excess goods

Date: 10 Mar, 2021

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External URL: https://timesofoman.com/article/know-oman-vat-payments-also-due-on-excess-unsold-goods

Muscat- March 10, 2021:

Value added tax is due on excess stocks of goods that have been bought by companies to be sold to customers, even if they remain in storage once that company has ceased operations, a legal expert in the country has said.

Even if a company is storing the goods or all commercial activities have stopped, the company will be liable to pay VAT for these goods. Only goods and services provided by commercial organizations as gifts would be exempt from taxes. As a commercial trader engaged in marketing, distribution, manufacturing, or retail, one should budget for this tax. The general rule is that the new VAT tax should apply to all products and services.

Oman is introducing VAT on April 18 2021 and all companies that will be liable for VAT should register before this date.

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Oman to impose Tax on High-Income Earners soon, says IMF

Date: 18 Feb, 2021

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Oman- February 17, 2021:

Oman’s finance ministry has indicated in its 2020-2024 economic plan that it is considering imposing a wealth tax in order to make government finances more sustainable as Covid-19 takes its toll on business activity.

The International Monetary Fund (IMF) has estimated that Oman’s budget deficit will reach nearly 19% of GDP this year. The new economic plan is projected to reduce that to 1.7% by 2024, according to a statement from the ministry of finance.The proposed tax would apply to high-income individuals, but the plan does not specify what the income brackets would be.

Currently none of the six Gulf Cooperation Council (GCC) states, collect income tax from individuals. Oman will become the first gulf state to introduce income tax on high earners in 2022.

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Oman Tax Authority publishes VAT Registration Guides

Date: 03 Feb, 2021

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External URL: https://tms.taxoman.gov.om/portal/web/taxportal/-/vat-registration-start?redirect=%2Fportal%2Fweb%2Ftaxportal%2Fvat-tax

Oman- February 3, 2021:

The Sultanate of Oman Tax Authority has announced the commencement of VAT registration from 1st February 2021 until 15th March 2021 for taxable persons with annual supplies exceeding or expected to exceed 1 million OMR. The voluntary registration will also be available for taxable persons with annual supplies or expenses exceeding or expected to exceed 19,250 OMR.

The registration must be made through the Oman Tax Authority’s Online Portal – www.taxoman.gov.om

Oman Tax Authority has released a list of ‘Manual Guides for VAT Registration’ explaining the registration requirements for business and individuals. It explains who is liable to register for VAT, and also explains the registration requirements in the period before the VAT Law is effective.

The Oman Tax Authority advises taxable persons to register for VAT within the preset deadlines to avoid any penalties levied on late registration. Taxable persons may source more information pertaining the registration procedure and other VAT details on the guides published on Oman’s Tax Authority website.

Click here to view the Guides for VAT registration.

Oman: Over 90 food items will be subjected to VAT at zero percent

Date: 13 Jan, 2021

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External URL: https://timesofoman.com/article/over-90-food-items-subjected-to-zero-tax-rate

Muscat- January 13, 2021:

The Chairman of the Tax Authority issued three executive decisions related to the implementation of the value-added tax, which will come into effect on April 16 of this year 2021.

Ministerial Decree 2/2021, dated 4 January 2021, detailed the list of around 93 food items that will be subject to VAT at the zero rate in Oman.

The list includes the following food products :

  • Meat, fish and poultry
  • Milk and dairy products
  • Fresh eggs, vegetables and fruits
  • Coffee and tea
  • Cardamom creels
  • Olive oil
  • Sugar
  • Bread
  • Salt
  • Bottled drinking water
  • Nutritional preparations for children

Oman Tax Authority: New executive decisions on VAT implementation

Date: 13 Jan, 2021

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External URL: https://timesofoman.com/article/new-executive-decisions-on-vat-implementation-issued-by-oman-tax-authority

Muscat- January 13, 2021:

In a series of executive decisions issued, the Tax Authority in Oman has announced the framework and related guidelines for registration of tax-eligible businesses and organizations in the Sultanate.

Businesses with an annual turnover of a minimum of OMR 38,500 are required to mandatorily register with the Tax Authority. However, registration is optional for businesses with a minimum turnover of OMR 19,250. These limits are in with the provisions of the GCC Unified VAT Agreement signed by the Sultanate in November 2016.
SMEs and micro-businesses have been given additional time to register their firms in order for them to equip themselves with the requisite IT systems and bookkeeping methods required to comply with the requirements of the VAT law.

First to register will be businesses with an annual turnover of over OMR 1 million. They must register between February 1 and March 15, 2021.

For businesses with a turnover of over OMR 500,000, the deadline for registration is July 1, 2021.

VAT is an indirect tax on most goods and is levied on the value-added of business operations, which is the difference between the final price of a commodity and the cost of materials and services.Confirming the implementation of VAT, the Ministry of Finance announced in the 2021 General Budget that the new level would be imposed on goods and services in Oman starting from April 2021, with exception of the education and health sectors and some basic commodities.

According to Royal Decree 121/2020, a 6-months grace period has been granted for the taxpayer to register, and prepare their internal system to implement the VAT. The value-added tax rate of 5 per cent to be applied in Oman is among the lowest rates at the international level.

“Therefore, it is expected that the impact of VAT on the cost of living in Oman will be minimal. The VAT will have a positive impact on the economic and social development and the international competitiveness of Oman. The financial resources obtained from this tax will contribute to building a sustainable economy for future generations, and it will also contribute to improving public services and continuing the development of infrastructure in future,” the ministry noted.

Zoho launches VAT-compliant software in Oman

Date: 17 Dec, 2020

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External URL: https://muscatdaily.com/Oman/389052/Zoho-launches-VAT-compliant-software-in-ME

Muscat- December 17, 2020:

Zoho, a global information technology company that offers over 45 business applications including CRM, business email and help desk, has launched its VAT-compliant accounting software, Zoho Books in the region.

As businesses in the sultanate prepare for the implementation of VAT, Zoho Books helps their seamless transition to the new tax law and ensure VAT compliance.

Having helped tens of thousands of businesses in the United Arab Emirates, Saudi Arabia and Bahrain easily transition to VAT with country-specific editions, Zoho Books is now offering its expertise to businesses in Oman to help with their accounting and VAT filing needs. The software has also been accredited by the Federal Tax Authority in the UAE and General Authority of Zakat and Tax in Saudi Arabia.

Hyther Nizam, president – MEA, Zoho Corp, said, “With the experience that we gained from bringing out tax-specific editions in the UAE, Saudi Arabia and Bahrain, we’ve built Zoho Books to provide a complete accounting solution for Omani business owners. Zoho Books, with its in-built features can help businesses create VAT-compliant transactions, record and file VAT returns with ease. It is also a great opportunity for businesses to transform their current business processes and adopt digitalization and automation of business finances.”

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Oman: Incentives announced for tourism sector

Date: 18 Mar, 2021

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External URL: https://www.timesofoman.com/article/ministry-announces-tax-exemptions-for-tourism-sector-in-oman

Muscat- March 18, 2021:

Oman’s Ministry of Heritage and Tourism has issued a circular on incentives for the tourism sector with an economic stimulus plan.

The plan was approved at the Council of Ministers, which his Majesty Sultan Haitham Bin presided on March 9, 2021. The initiative aims to achieve high growth rates as per Oman Vision 2040.

“It also aims to support efforts to extenuate the impact measures taken due to the pandemic on the national economy by providing a set of measures and initiatives that supports economic recovery, enhancing the performance of economic activities and foreign investment” states an official statement by Oman’s Ministry of Heritage and Tourism.

Incentives approved for the tourism sector include:

  • Exemption from the income tax for hotel establishments for two tax years – 2020 and 2021.
  • Exemption from the tourism tax payable by tourism establishments to the Ministry starting from March 10, 2021, until December 31, 2021.
  • Postponement of the settlement of the tourism tax until March 9, 2021, payable by tourism establishments at the end of December 2021.

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Oman to levy 5% VAT from 16 April, 2021

Date: 16 Mar, 2021

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External URL: https://www.khaleejtimes.com/business/economy/oman-to-levy-5-vat-from-next-month

Muscat- March 16, 2021:

Oman will start implementing five per cent value-added tax (VAT) from April 16,2021. It is estimated that VAT will contribute 1.5 per cent towards the country’s gross domestic product (GDP) and raise around 400 million Omani riyals (Dh3.8 billion; $1 billion) per year for the country’s exchequer.

The implementation of VAT comes in line with the GCC framework that was agreed between the six nation bloc. Saud bin Nasser bin Rashid Al Shukaili, chairman of the Tax Authority in Oman, said all necessary preparations to implement VAT from April 16 have been completed.

Oman VAT timeline

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