Introduction of staggered VAT registration by Oman Tax Authority

Girish ChandGirish Chand    01 March 2021
Introduction of staggered VAT registration by Oman Tax Authority

The Oman tax authority recently introduced staggered VAT Registration by Oman Tax Authority. This step would be helpful to both – the entities as well as to the Oman Tax Authority to phase out the registration and introduce VAT in Oman more efficiently. The following table shows the staggered VAT registration structure:

Taxable Turnover

Registration Due date

Effective Date of Registration

Above OMR 1million

1st Feb 2021 to 15th March 2021

16th April 2021

Between OMR 500K to OMR 1 million

1st April 2021 to 31st May 2021

1st July 2021

Between OMR 250K to OMR 499,999

1st July 2021 to 31st Aug 2021

1st Oct 2021


Between OMR 38500 to OMR 249,999

1st Dec 2021 to 28th Feb 2022

1st April 2022

The phased approach will lead to certain impacts as follows:

On Entities registering in the Initial Phase for VAT in Oman

  • Entities will be required to get their full system ready for implementing VAT from 16thApril 2021 as they would have to charge VAT on all transactions w.e.f 16th April 2021
  • All imports into the country wef sixteenth April 2021 will have an extra effect of 5% VAT. It stays not yet clear whether the Opposite Charge Component and import related VAT payments would be encouraged through the VAT returns. On the off chance that it isn't empowered, there would be additional cashflows for VAT payments on import which can be asserted therefore through the returns.
  • Declarations from their suppliers would be required by these entities in the event that they are not needed to register for VAT, as these suppliers would not charge VAT on their suppliers s.
  • These entities would need to survey their contracts quickly to guarantee that they can charge VAT after sixteenth April 2021. On the off chance that the contracts are quiet and they can't arrange the terms with their clients, the provisions after sixteenth April 2021 would be presumed to be inclusive of VAT and this might impact their margins.

On Entities registering in the Subsequent Phases for VAT in Oman

  • These entities will get more time to get their framework ready for VAT
  • Declarations of VAT non-applicability will be required to be issued by these entities to their customers who are already registered for VAT
  • 5% VAT on imports will have to be borne by these entities because they are not registered. This would lead to increased costs especially for the sales during the period that they are not registered for VAT. But the input VAT credit for stock held and sold subsequent to their effective VAT registration date would still be available.
  • VAT would be incurred on their local purchases and services from their suppliers registered for VAT. Input VAT credit on their stock and expenses primarily related to further taxable supplies subsequent to their VAT registration date would be available. This would require these entities to track their input VAT incurred during the period of non-registration so that they could analyze the input VAT credit that they can take subsequent to the VAT registration date.
  • These entities will have extra time to inculcate VAT clause in their contracts so that their margin is not impacted. Moreover in case of VAT registered suppliers , they could choose to consider their contracts as being inclusive of VAT, in case the VAT clause is not specified in the contracts entered before 16thApril 2021. This would be valid for sales which they are likely to make after 15th April 2021 and before their VAT registration, as this could lead to increased costs in case VAT is levied on the pre VAT prices by their VAT registered suppliers.

Disclaimer: Content posted is for informational & knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. The view/interpretation of the publisher is based on the available Law, guidelines and information. Each reader should take due professional care before you act after reading the contents of that article/post. No warranty whatsoever is made that any of the articles are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.

You can access Law including Guidelines, Cabinet & FTA Decisions, Public Clarifications, Forms, Business Bulletins for all taxes (Vat, Excise, Customs, Corporate Tax, Transfer Pricing) for all GCC Countries in the Law Section of GCC FinTax

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