Vat in Oman: to be imposed from April 2021


Muscat: The tax authority issued three executive decisions related to the implementation of the value-added tax, which will come into effect on  16th April 2021.

The first decision set the mandatory registration threshold at (38,500) Omani riyals, and according to this decision, the taxable person will be obligated to register with the tax authority in the event that it exceeds or is expected to exceed the value of his annual supplies (taxable supplies) the value of the aforementioned amount.

The decision also specified the voluntary registration limit at (19.250) Omani Rials, according to which the taxable person has the right to apply for voluntary registration in the event that the total value of annual supplies or expenses exceeds or is expected to exceed what its value is (19.250) Omani Rials.

The determination of the mandatory and optional registration threshold comes in line with the provisions of the unified value-added tax agreement for the Gulf Cooperation Council states, which the Sultanate signed in November 2016.

The second decision, which relates to the date of registration for VAT, specifies the dates during which the taxable person must apply for registration to the tax authority.

The decision took into account the gradual registration of taxable persons according to the size of their annual supplies, with the aim of giving small and medium enterprises sufficient time to prepare and qualify their systems and mechanisms for keeping books and invoices to enable them to comply with the requirements of the VAT law.

The decision clarifies the registration date, which is the effective date of the registration. The taxable person will have to comply with the requirements of the law, including the start of imposing value added tax on his supplies (sales).

According to the decision, those subject to the tax whose annual supplies exceed or are expected to exceed one million Omani riyals will be required to register with the Tax Authority during the period from February to the 15th of March 2021, provided that the date of the registration is effective from the date of applying the tax on April 16 2021.

The registration of those subject to the tax who exceeds or is expected to exceed the value of their annual supplies of (500,000) Omani Rials will start from April, and the effective date of registration for this category will be the first of July 2021, and then progressing down in the rest of the segments until the registration threshold is reached The minimum course is (38,500 Omani Rials).

The decision provides the right to register voluntarily for those subject to tax as of February 1, 2021, in the event that the total value of annual supplies or expenditures exceeds or is expected to exceed what the value of (19.250) Omani riyals will be in order to ensure that the small and medium business sectors that wish to register are not affected by the tax system. The added value and benefit from the features that you may get, such as the right to recover the tax you bear on its inputs

The third decision specified the food commodities subject to value-added tax at a rate of zero percent (that is, excluded from the value-added tax). The decision included a list of (94) items of the customs tariff to which this exception would be applied, including meat, fish, poultry, dairy products and their derivatives, fresh eggs, vegetables, fruits and coffee. Tea, cardamom, cereals, olive oil, sugar, baby food preparations, bread, bottled drinking water and table salt.

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