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24 January 2021
Oman VAT Registration Guide
(Transitional Period)

The Oman tax authorities have recently released ‘VAT Registration Guide (Transitional Period)’, that explains the registration requirements for businesses and individuals. It covers different aspects such as liability to register for VAT and the registration requirements in the period before the VAT law is effective (i.e., the Transition period).

The guide has clarified that the below-mentioned steps should be followed in case any business/individual wants to register for VAT-
 
  • Step 1: Determine whether a person must register for VAT.
  • Step 2: Determine the components of annual supplies for the purpose of VAT registration.
  • Step 3: Compute or estimate the value of supplies for relevant periods as explained in the guide.
  • Step 4: Registration timelines to be determined based on annual supplies.
  • Step 5: Submission of registration application as per procedures outlined.

We have summarized the stepwise guidance provided in the VAT registration guide below:

Step 1 -
Determine whether a person must register for VAT
Person required to register mandatorily

A mandatory registration would be required if any of the below condition is satisfied –

For a person who has a place of residence in Oman or who conducts a commercial, industrial, professional, or other activity in Oman For a person who does not have a place of residence in Oman
  • If the actual value of taxable supplies made in the current month and previous 11 months combined, more than OMR 38,500; or
  • If the expected value of taxable supplies to be made in the current month and next 11 months is expected to be more than OMR 38,500.
  • If he/she is obliged to pay tax, regardless of the value of supplies made.

Person required to register voluntarily

A voluntary registration can be applied if any of the below condition is satisfied –

For a person who has a place of residence in Oman or who conducts a commercial, industrial, professional, or other activity in Oman For a person who does not have a place of residence in Oman
  • If the actual value of taxable supplies or expenses made in the current month and previous 11 months combined, more than OMR 19,250; or
  • If the expected value of taxable supplies or expenses to be made in the current month and next 11 months is expected to be more than OMR 19,250.
  • Not applicable.

[Note: Expenses for the purpose of voluntary registration would mean expense relating to commercial, industrial professional or other activity conducted in Oman]
 
Step 2 -
Determine the components of annual supplies for the purpose of VAT registration

The value of supplies which is to be included and which are not to be included while calculating threshold for VAT has been tabulated below -

Supplies/Expenses Whether to be included for calculating a threshold
Value of taxable supplies of goods Yes, to be included as subject to VAT @ 5%
Value of sale of Building (part of capital asset) No, a capital asset is not to be considered
Exports Yes, to be included as subject to VAT @ 0%
Services received from outside Oman Yes, subject to reverse charge mechanism
Step 3 -
Compute or estimate the value of supplies for relevant periods as explained in the guide
Calculating the value of supplies before the effective date of law
  • For the purposes of determining the value of taxable supplies before the effective date of the law, a person or business will need to determine which of its supplies would be taxable supplies as if the law was effective as on the date of calculation
  • This means that a person or business must determine whether the supplies made (earlier) would have been taxable or exempt basis the law.
     
    Actual and expected annual supplies should be calculated as follows -
    Actual Annual Supplies Supplies made during a period of 12 months – from 1 November 2019 to 31 October 2020
    Expected Annual Supplies Expected to be made during a 12-month period - from 1 October 2020 to 30 September 2021

  • The above is used to determine whether a person needs to register according to the staggered registration dates as per decision no. 3/2021
  • Even if a person is not required to register from the effective date of the law, it must be checked if registration is required before the staggered date as a result of an increase in turnover or an increase in expected turnover after the effective date of the law.
Calculation of Annual Supplies after the effective date of the law
  • The actual annual supply is the total actual value of supplies made during a 12 month period ending on the last day of any month.

Example:

While calculating the results of a company’s operation for a period of 12 months ending 30 April 2021, supplies made from 1 May 2020 to 30 April 2021 shall be considered.

  • The expected annual supply is the total expected value of supplies to be made during a period of 12 months, starting from the beginning of any month

Example:

While calculating the expected results of a company’s operation for a period of 12 months from 1 April 2021, supplies made from 1 April 2021 to 31 March 2022 shall be considered.


Step 4 -
Registration timelines to be determined based on annual supplies

After calculating the value of annual supplies, the person who is required to register with the tax authorities shall do so within the dates tabulated below –

(A) For mandatory registration –
 
Category Annual Supply of person in OMR Deadline for Registration Effective date of Registration
A Exceeding OMR 1,000,000 1 February 2021 to 15 March 2021 Effective date of law [i.e. 16 April 2021]
B From OMR 500,000 to OMR 1,000,000 1 April 2021 to 31 May 1 July 2021
C From OMR 250,000 to OMR 499,000 1 July 2021 to 31 August 2021 1 October 2021
D From OMR 38,500 to OMR 249,999 1 December 2021 to 28 February 2022 1 April 2022

Note: Effective date of registration would denote the date from which the taxable person would be required to comply with all provisions of the law such as issuing tax invoice, bookkeeping, submitting returns, etc

(B) For voluntary registration –

Voluntarily registration for VAT can be applied at any time starting from 1 February 2021.


Step 5 -
Submission of the registration application

The following steps must be taken to register with the tax authority:

  1. The person required to register must visit the tax authority's online portal at https://taxoman.gov.om/portal/ar/home
  2. Log in via the Digital Certification Service
  3. The VAT registration electronic form shall have to be filled in accurately
  4. It is to be ensured that the data entered is correct and that the application meets all the requirements
  5. Submit the application and retain the application receipt
  6. The tax authority shall review the registration application, and in case it is approved, will issue a VAT registration certificate that contains the VAT registration number and other information such as the registration effective date, tax periods and other important details.

Once the VAT registration certificate is obtained, the following actions would be required –

  • The VAT registration certificate must be clearly displayed at every location in which the activity is conducted
  • The VAT identification number must be included in all documents issued, such as tax invoices, communications, and all other documents issued by the taxable person.
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