Three VAT-Related Executive Decisions To Be Enforced In Oman From 16 April

Muscat: The Tax Authority today issued three executive decisions pertaining to the implementation of the Value Added Tax (VAT), which will be enforced by 16 April 2021.

The first decision determines the minimum volume of supplies requiring the taxpayer to compulsorily register with the Tax Authority. The second relates to deadlines for registration to the Tax Authority while the third decision lists the foodstuff exempted from the VAT (zero VAT payment).

The first decision specified that registration to the Tax Authority becomes compulsory if the taxpayer’s annual supplies stand at RO38,500 or more or are expected to reach this ceiling.

The decision set the ceiling of ‘voluntary’ registration to the Tax Authority at RO19,250 and states that, accordingly, the taxpayer may apply for voluntary registration if the applicant’s annual supplies stand at, or cross or expected to go beyond the value of RO19,250.

Determining ceilings for compulsory and optional registration comes within the context of the provisions of the GCC Unified VAT Agreement, which the Sultanate signed in November 2016.

The second decision fixes deadlines for taxpayers’ registration to the VAT at the Tax Authority.

The decision took into account a certain level of progression in taxpayers’ registering to the Tax Authority, depending on the volume of their annual supplies. The aim is to grant small and medium enterprises sufficient time to prepare and adjust their systems and their mechanisms of filing and billing to meet the requirements of the Tax Law.

The decision sets the Deadline of Registration, which is the date on which the taxpayer will be required to implement the provisions of the VAT Law, according to the volume of the taxpayer’s supplies (sales).

The decision states that taxpayers whose value of annual supplies crosses or is expected to cross RO1 million have to register to the Tax Authority during the period from 1 February 2021 to 15 March 2021. Accordingly, the VAT for this segment (RO1 million-worth supplies) becomes applicable from 16 April 2021.

As for taxpayers whose value of supplies crosses or is expected to cross RO500,000, their registration begins in April and the Deadline for Registration will be 1 July 2021. The deadlines of lower segments follow a similar slope (per volume of supplies) till the minimum level of RO38,500-worth supplies.

The decision grants taxpayers a right to register voluntarily to the Tax Authority with effect from 1 February 2021 in case the value of their supplies crosses or is expected to cross RO19,250.

The third decision specified the type of foodstuff exempted from the VAT. The list consists of 94 customs tariff items to be exempted from the VAT. These include meats, fish, poultry, dairy products, fresh eggs, vegetables, fruits, coffee, tea, cardamom, cereals and grains, olive oil, sugar, child foods, bread, bottled water, and table salt.