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 on the next official Gazette on 18 October 2020. Watch this space for the English translation.
The law will come into force 6 months after the publication, in April 2021. 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.
The Omani law is a closer sister to the UAE VAT law and will follow the Bahraini law, applying 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 COVID-19 outbreak – amplified pre-existing fiscal strains and low oil prices. The IMF estimated generation of new 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.
The Executive Regulations will be published in December. Registration are expected to open in January 2021. Register for our webinar via email@example.com