On 12 October 2020, His Majesty Sultan Haitham bin Tarik issued Royal Decree 121/2020 to implement Value-Added Tax (VAT) in Oman. The Decree is expected to be published in the next official Gazette on 18 October 2020.
The law will come into force in April 2021 and is in line with the GCC VAT Agreement. The standard VAT rate will be 5% and will be levied on most goods and services, with exceptions made to some supplies, which will be zero-rated or exempt.
After Saudi Arabia, the United Arab Emirates, and Bahrain, Oman will become the fourth GCC country to implement VAT. The Omani law is a closer sister to the UAE VAT law and will follow the Bahraini law, which concerns the imposition of hefty penalties, including, in some cases, imprisonment (i.e., failure to register for tax).
VAT is being implemented in response to severe financial and economic repercussions due to the COVID-19 outbreak, which amplified pre-existing fiscal strains and low oil prices. The IMF estimated the generation of new fiscal revenue between 1.5 and 3 percent of non-oil GDP, from the introduction of VAT.
Taxpayers will have a little over six months of preparation time before the commencement date of the law. VAT registration is expected to open in January 2021, and further details will be available in December when the VAT Executive Regulations are expected to be published.
Join LexisNexis Middle East and Aurifer Middle East Tax for a webinar on 19 October 2020 from 12PM to 1PM (Oman & UAE time) where will provide insight into the new law and give practical tips on how to prepare in the next six months before the commencement date of the Law.
- Thomas Vanhee, Founder, Aurifer Middle East Tax
IN COLLABORATION WITH
Insight into Oman's New VAT Law
12:00 PM - 1:00 PM