Oman: VAT rules and registration, effective date of 16 April 2021

Oman: VAT rules and registration

The value added tax (VAT) regulations have an effective date of 16 April 2021.

1000

Related content

Royal Decree 121/2020 implementing the VAT law was published in the official gazette on 18 October 2020, with an effective date 180 days after publication—hence, 16 April 2021.

Taxpayers that meet the threshold for mandatory VAT registration must comply with certain timelines.
 

Value of annual supplies

Timeline for registration

Effective date of registration

Exceeding RO 1 million

1 February 2021 to 15 March 2021

Friday, 16 April 2021

Between RO 500,000 to RO 1 million

1 April 2021 to 31 May 2021

Thursday, 1 July 2021

Between RO 250,000 to RO 499,999

1 July 2021 to 31 August 2021

Friday, 1 October 2021

Between RO 38,500 to RO 249,999

1 December 2021 to 28 February 2022

Friday, 1 April 2022

 

Taxpayers that meet the threshold for voluntary VAT registration may apply to register anytime on or after 1 February 2021.


Value and period of supplies

The value of supplies for registration purposes includes:

  • The value of taxable supplies, standard-rated as well as zero-rated, excluding capital assets supplies
  • The value of goods and services supplied to the taxable person and subject to the reverse charge mechanism
  • The value of intra-GCC supplies of goods and services

For the purposes of voluntary registration, the value of supplies or the value of inputs (expenses) subject to Oman VAT may be considered. 

The value of supplies or inputs may be calculated looking back (i.e., the current month plus 11 months preceding the current month) or looking ahead (i.e., the current month plus 11 months succeeding the current month).


KPMG observation

The VAT registration schedule implies that Oman, similar to Saudi Arabia and Bahrain, will stagger the introduction of VAT. This means that until the VAT registration schedule runs its course, some businesses would be registered while others may not. As a result, businesses that are not registered for VAT purposes could make purchases from businesses that are registered for VAT and incur input VAT. Without a mechanism or compliance with the mechanism for recovery of pre-registration input tax credit, this input VAT could become a cost to the purchasing business.

To avoid tax leakage, and keep administration and compliance simple, businesses need to plan for, among other things, their registration and procurement strategies. 

Read a January 2021 report prepared by the KPMG member firm in Oman

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal