October 16, 2020
Oman introduces VAT law
On 12 October 2020, His Majesty Sultan Haitham Bin Tariq issued Royal Decree No. 121/2020 to introduce Value Added Tax (VAT) in Oman at the rate of 5%. The law will come into force in April 2021.
The Gulf Cooperation Council VAT Framework Agreement stipulates that businesses with taxable turnover in excess of US$100,000 must register for VAT, and businesses with taxable turnover between US$50,000 and US$100,000 have the option of registering for VAT. Oman will adopt a phased introduction with an initial focus on larger businesses.
Businesses that have not yet begun their VAT implementation projects will need to start preparing if they are to be compliant when VAT is implemented. Being a transactional tax, the introduction of VAT is expected to have a wide impact across the business. Some of the key areas that businesses should look at to assess their readiness for VAT include:
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLC, Muscat
Ernst & Young LLP (United States), Middle East Tax Desk, New York