Oman Tax Overview – VAT, Corporate Tax, and More Explained

The Sultanate of Oman introduced Value Added Tax (VAT) on 16 April 2021, as part of its accession to the Gulf Cooperation Council (GCC) Framework Agreement for the Implementation, Administration, and Enforcement of VAT. The VAT system in Oman is aimed at diversifying government revenue and reducing reliance on oil revenues, in line with broader economic reform objectives outlined in Oman Vision 2040.

Omani VAT is charged at a regular rate of 5% on most services and goods. Businesses with a required threshold are mandated to register, charge VAT on taxable supplies, file periodic VAT returns, and maintain accurate records. The Oman Tax Authority (TA) is responsible for administering and enforcing VAT laws.

For compliance, companies need to comprehend their registration, invoicing, recordkeeping, filing of returns, and payment obligations. Non-compliance attracts penalties, audits, and damage to reputation.

VAT RATES

TYPES OF VAT REGISTRATION:

1. Mandatory Registration:
   Businesses must mandatorily obtain VAT registration if the total value of supplies in a year exceeds or is expected to exceed Omani Rial (OMR) 38,500.
2. Voluntary Registration:
   Businesses in Oman can voluntarily obtain registration if the total supplies or expenditures in a year exceed or are expected to exceed OMR 19,250.

STEP-BY-STEP PROCESS FOR VAT REGISTRATION

STEP 1: Access the Online Portal, visit: www.taxoman.gov.om. Log in Using One of the Following: Card Reader, Electronic Authentication, or Username & Password.

STEP 2: Click on Register Taxpayer

STEP 3: Enter the commercial registration number and then click Register. 

STEP 4: Click on Register VAT Obligation and then click on Continue. 

STEP 5: Fill in the required fields and then click Save Draft at the bottom of the page. 

STEP 6: Click on attachments and then click on add a new attachment. 

STEP 7: Please attach the commercial register and a copy of the civil ID. 

STEP 8: Then click Save and Close. 

STEP 9:Click on the word “Submit” and then print the decision. Click on Print VAT Certificate. 

Important note: After registration, you must submit a value-added tax return. Added during the period allowed by the Tax Authority after each quarter.

STEP-BY-STEP PROCESS FOR VAT FILING

Step 1: Access the Oman Tax Portal

Log in to the official Oman Tax Portal using your credentials. Navigate to the VAT returns section and select Add New Return. The system auto-fills basic business details.

Step 2: Declare Supplies and VAT Calculations
Break down supplies into categories such as domestic sales, intra-GCC supplies, and reverse charge transactions. Calculate output VAT, input VAT credits, and net liability. Ensure accuracy in simplifying tax returns in Oman.

Step 3: Request Refunds (If Applicable)
For refunds exceeding OMR 100, upload the completed Taxpayer Checklist from the TA’s website. Check the “I want to be refunded” option and submit supporting documents.

PENALTIES:

CONCLUSION

VAT compliance in Oman is a key regulatory imperative echoing the nation’s vision towards fiscal diversification and economic diversification in line with Oman Vision 2040. The imposition of VAT at a fixed rate of 5% is a strategic initiative to create a stable source of non-oil revenues while being part of the wider GCC VAT Framework Agreement.

The Oman Tax Authority is central to administering VAT and has established precise procedural guidelines and electronic resources to facilitate compliance processes.

Non-compliance with VAT laws can lead to significant financial fines, audit attention, and reputational loss. Thus, organizations must put in place strong internal tax governance and consult experts when needed to maintain ongoing compliance with VAT legislation.

Ultimately, adopting VAT compliance not only reduces legal and financial risks but also enhances corporate credibility and serves positively towards Oman’s long-term economic growth.