Oman: Business Incentives To Rectify Multiplicity of Registers to be Launched

Oman’s Commerce, Industry and Investment Promotion Ministry is going to launch a raft of business incentives to rectify multiplicity of register issues.

They will be launched on 15 June 2021.

Under the incentives, affected entities will have one year to clear multiple entities or merge them within six months.

The aim is to streamline the process of status adjustment for these entities and encourage young people and owners of multiple commercial registers to clear or merge their businesses.

It is also aimed at eliminating this phenomenon, regulating the market, improving the business climate, allowing competition and removing inactive commercial registers from incentive packages and fee exemptions.

A file cancellation may be processed electronically through the Invest-Easy portal or through Sanad Centres.

The relevant documents will have to be attached.

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Oman: Expatriate Work Permit Fees to be Imposed From 1 June 2021

Oman’s Labour Ministry has announced expatriate work permit fees will be imposed from 1 June 2021.

They will apply to expatriates working in high and medium level jobs, as well as technical and specialist jobs. Fees for obtaining business licenses of SMEs will also be implemented on the same date.

It will cover existing and new applications as well as previous applications of business owners who failed to pay the prescribed fees before the enforcement of this decision.

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Oman: Transportation of Goods in Special Zones to be Zero-rated for VAT Purposes

Oman Daily Observer, 27 April 2021: Oman’s Public Authority for Special Economic Zones and Free Zones has announced the Special Economic Zone at Duqm and the free zones in Salalah, Sohar and Al Mazunah are classified as Special Zones in line with Article 102 of Oman Decision No. 53/2021 which issued the Implementing Regulations to Oman Sultani Decree No. 121/2020 (the VAT Law).

In line with the conditions specified in Article 103 of Oman Decision No. 53/2021 all these special zones will be zero-rated for VAT purposes.

Under Article 54 of Oman Sultani Decree No. 121/2020, supplies of goods or services to or from the Special Zones, or within them, may be zero-rated, following the conditions laid down in Articles of 101, 102, 103, 104, 105, 106 and 107 of Oman Decision No. 53/2021.

All companies, enterprises, businesses and establishments operating in these zones should comply with the conditions in the Implementing Regulations, until the Tax Authority publishes detailed procedures for applying VAT at zero percent in the Special Zones. These include VAT Registration and VAT Administration.

In line with the Implementing Regulations, companies, establishments, enterprises, or those working in Special Zones and whose entire supplies of goods or services are taxable at the zero rates, must apply to the Tax Authority for authorisation and VAT registration.

Applications may be submitted at https://www.taxoman.gov.om/. The applicant must attach a copy of the commercial registration certificate and a copy of the license certificate issued by the relevant Special Zone Authority for carrying out economic activity in the Zone to the application.

For supplying or transporting goods to or within these Special Zones, Article 103 of Oman Decision No. 53/2021 states the customer or the recipient is subject to tax and the customer or the recipient be licensed and registered by the operating and supervising authority of the Special Zone to conduct the activity within the Zone. Under the same provision, the customer or the recipient should receive the goods for the purposes of the activity within the Special Zone and the goods will not be among the goods excluded from the right of deduction in line with Article 56 of Oman Decision No. 53/3021.

Under Article 103 of Oman Decision No. 53/2021, documents proving the transfer of goods to, within or between the Special Zones must be kept so as they can be certified by the entity operating and supervising the Special Zone with regard to the supply of goods within the Zone. This also applies to documents issued by Oman Customs, with regard to the supply and transportation of goods to the Special Zone or from one Special Zone to another one.

In terms of the supply of services, the customer has to be registered for VAT in line with the registration rules and the client must be licensed and registered by the Authority operating and supervising the Special Zone. They must also have received services for the purposes of activity in the Special Zone. These services do not include restaurant and hotel services, food and beverage undertakings and cultural, artistic, sports, education and entertainment services provided for in Article 24(5) of Oman Sultani Decree No. 121/2020.

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Oman: Ministry is working on more foreign investment initiatives for various sectors

Oman’s Commerce and Industry and Investment Promotion Minister has announced the Ministry is working on more foreign investment initiatives for various sectors. The initiatives will include drafting a national strategy for intellectual property, e-commerce activities and regulations regarding fees for displaying Omani products in commercial complexes. Amendments to the Sultanate’s Industrial Law are also being considered and an industrial strategy is being prepared which will be in line with Oman Vision 2040.

Oman: New Financial Circular Issued

Oman’s Finance Ministry has issued Oman Financial Circular No. 1/2021 on awarding Government tenders which are no more than 10,000 Rials to SMEs. Under the Circular, all Ministries and public departments should award Government tenders for providing services and carrying work of no more than 10,000 Rials to SMEs who have the Riyada card.

Oman: Sultani Decree No. 33/2021 on the pension and social protection law has been issued

Oman Sultani Decree No. 33/2021 on the pension and social protection law has been issued.The decree establishes a new fund called the Social Protection Fund which has egal capacity and enjoys financial and administrative independence. The funds’ articles of association will be issued by a Sultani Decree. The decree also establishes another fund called the Military and Security Military Fund which also has legal capacity and enjoys financial and administrative independence.

Oman: Clarity Sought on VAT Impact on Oil and Gas Industry

The oil and gas industry in Oman is awaiting clarity on the impact of VAT on them. Upstream and midstream activities are zero-rated for VAT purposes. Downstream activities are likely to be taxed at the standard rated of 5%. This includes refining and petrochemicals. These expectations are based on the provisions of the Implementing Regulations to the VAT Law. The Regulations to Oman Sultani Decree No. 121/2020 were issued in Oman Decision No. 53/2021.

Oman: Services Exempt From VAT Announced

Following the issuing of the Implementing Regulations to the VAT Law earlier this month, the services which will be exempt from VAT have been clarified. Oman Decision No. 53/2021 implements Oman Sultani Decree No. 121/2020. Banking and financial services supplied by banks and financial institutions licensed by the Central Bank of Oman or any of the competent authorities will be tax-exempt for VAT purposes or zero-rated for VAT purposes. Healthcare supplies and services provided by licensed medical institutions will also be tax-exempt for VAT purposes or zero-rated for VAT purposes. Services provided by educational institutions licensed by the relevant education authorities in the Sultanate will be tax-exempt for VAT purposes or zero-rated for VAT purposes. VAT will come into force in the Sultanate on 16 April.

Oman: Labour Ministry Issues Warning

Oman’s Labour Ministry has issued a warning to all private sector companies to benefit from the facilities offered by the Ministry for companies and expatriate employees. It comes ahead of a 31 March 2021 deadline. All employers and employees who want to leave the country should use the time left to comply. The Ministry added no applications will be considered after this date. Foreign employees will be able to leave before 31 March 2021 and all approvals will be cancelled after this.