VAT Fines and Penalties in Oman

Yarab A | Updated on: May 30, 2022

VAT Fines and Penalties in Oman
VAT Penalties and Punishments in Oman

A VAT registered business needs to adhere to several compliance responsibilities prescribed under Oman VAT. Issuing tax invoices, filing VAT returns, maintaining records and books etc., are some of the key things that businesses should adhere to. Any violation or non-compliance would attract hefty fines and penalties. The penalties in Oman range from 500 OMR to punishment leading to imprisonment, depending upon the severity of the breach.

Record and Book Keeping Requirement under Oman VAT

Expenses on which Input VAT Deduction is Blocked

VAT Fines and Penalties in Oman

Given that there are multiple VAT responsibilities that a registered business needs to adhere, the Oman VAT law and regulations has specified penalties and punishment for different types of violations. Let’s start with administrative fines.

Administrative Fines

Violation	Fines and Penalty
Failure to submit tax returns on the prescribed dates for submission	An administrative penalty of not less than 500 Omani Rial and not exceeding 5,000 Omani Rial
Failure to display VAT registration certificate in a visible place
The taxable person whose registration has been cancelled fails to keep accounting records and books, and documents in accordance with the VAT regulations
The refund of the VAT was based on incorrect documents or details.	An administrative penalty of not less than 1000 Omani Rial and not exceeding 10,000 Omani Rial
The taxable person fails to apply for cancellation of registration in the compulsory cases specified in the law and regulations
The person who incorrectly received a tax refund fails to repay the amount due as soon as they become aware of the error
Failure to present prices of goods and services inclusive of tax
If the taxable person does not declare the actual tax in the tax return of any tax period	A penalty of not less than 1% but not exceeding 25% on the difference between the value of the actual tax due + the value of the tax previously declared
In cases of tax evasion	A penalty of three hundred 300% of the difference in tax due related to this evasion and may attract punishments/penalties discussed below

VAT Penalties and Punishments in Oman

On committing any of the below-mentioned crimes or violations, an imprisonment penalty of not less than 2 months but not more than (1) year, and a fine of not less than 1000 Omani riyals but not more than 10,000 Omani riyals would be imposed. It can also be possible that any of the above mentioned can be imposed by the authorities.

The taxable person deliberately refrains from identifying the responsible person
The responsible person deliberately fails to notify the authority and obtain its consent during the period of his absence for a period of more than ninety (90) days
The Taxable Person deliberately fails to notify the authority of any adjustments on his data in accordance with the law
The responsible person deliberately fails to appear as requested by the authority
The responsible person deliberately fails to submit a Tax Return for any tax period
The taxable person deliberately fails to maintain accounting records and books in a regular manner in accordance with the provisions of VAT law
Deliberately refrain from maintaining tax invoices and documents for the required period in accordance with the provisions of this law
Deliberately refraining from issuing a Tax Invoice when required in accordance with the provisions of this law
Deliberately issuing an invoice stating the amount of the tax due, other than the tax imposed in accordance with the provisions of this law
Any conduct, act, procedure, or abstention is performed to prevent the authority’s officers or its delegates from exercising the functions or tasks prescribed by this law
The taxable person or any person deliberately refusing to submit any documents, data, records, accounting books, Tax Invoices or others as determined in the VAT law
Deliberately including in a refund application incorrect data or information.

An imprisonment penalty of not less than 1 year but not more than 3 years, and a fine of not less than 5,000 Omani riyals, and not more than 20,000 Omani riyals, or one of these two penalties will be imposed on committing below-mentioned violations:

Deliberately refraining from registering with the authority
Deliberately refraining from including actual tax amount and tax due in the tax return
Submitting forged tax returns, documents or records to dispose payment of tax in part or in full.
Deliberately destroying, hiding or dispossessing any documents, records, accounts, lists or any other requested by the authority for submission according to the provisions of VAT law, if the destruction, concealment, or disposal is conducted within (1) year from the authority’s notification receipt date
Deliberately motivating or supporting the taxable person in submitting returns or records or other documents that are incorrect related to the obligations of the taxable person

In case of recurrence of violations, the court may double the penalty and increase the imprisonment. It is apparent that Oman expects the business to be compliant and filling to which attracts hefty fines. Here is why VAT software plays a crucial role in avoiding violations. TallyPrime, a business management software, is enhanced to support the VAT requirements in Oman fully. Using a single software, you can issue VAT compliant invoices, record different types of VAT transactions, file VAT returns, maintain records and books, etc.

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