VAT Rate in Oman

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Yarab A | Updated on: September 16, 2021

VAT in Oman is expected to be introduced from 16th April, 2021 and it is all set to become the 4th GCC member country after UAE, Saudi and Bahrain to do so. The VAT rate in Oman is at 5% which is in line with the GCC framework. Starting 16th April,2021, a VAT rate of 5% will be levied on the supply of goods and services in the state of Oman.

VAT Rate in Oman

While most of the supplies are expected to attract a standard rate of 5% VAT, the Oman Vat law is also provisioned to allow certain exceptions to levy 5% VAT. Certain type of notified supplies will be either exempted or zero-rated

Oman VAT Rate Structure

Rate Type

Rate of Tax

Standard Rate

5%

Zero-Rated

Nil

Exempt Rate

0%

As mentioned above, the Oman VAT tax structure is broadly categorized into standard rate, zero-rated, and exempt rate.

Read  Who Should Register Under Oman VAT? to know the types of business and guidelines to register under Oman VAT. 

VAT Rate Structure

  • Standard Rate

All goods and services bought or sold or imported into the Sultanate of Oman are subject to VAT and a standard rate of 5% VAT will be levied on all such supplies. The businesses registered under Oman VAT are responsible to levy VAT @ 5% on such supplies, collect it from their customers and remit it to the government.

  • Zero-Rated supplies

Zero-rated supplies are taxable supplies but are taxed at a 0% VAT. In other words, certain notified supplies, mostly exports, are treated as zero-rated meaning a nil rate of tax will be levied. Though they are taxed at 0% VAT, registered businesses can still claim input VAT on purchases and receive VAT refunds.

  • Exempt supplies

Exempt supplies are those that do not attract VAT. In simple words, a supplier of exempt supplies does not collect or charge VAT on its sales and also not allowed to claim the input VAT paid on its purchases.

Key points for businesses to consider in Oman VAT tax

  • Since the businesses are required to collect VAT at 5% only on taxable supplies excluding the zero-rated supplies, businesses must understand the supplies they are making
  • Determine if any of your supplies are of zero-rated or exempt supplies
  • If none of your supplies are under the zero-rated list and exempt list, it is understood that all your supplies are taxable supplies and you need to charge VAT at 5%
  • If few of your supplies are under zero-rated list or exempt list, except those, all others will be taxable supplies and you need to charge VAT at 5%.

Read  Who Should Register Under Oman VAT? to know the types of business and guidelines to register under Oman VAT. 

Frequently asked questions

What is the VAT rate in Oman?

A rate of 5% will be levied on the supply of goods and services in the state of Oman.

Read more on VAT rate in Oman

Is there any VAT in Oman?

Yes. Oman implemented a new VAT system in April 2021 which attracts 5% VAT on all supplies of goods and services in the country.

What is Oman zero-rated VAT?

Zero-rated supplies refer to the taxable supply on which VAT is charged at a zero rate. As the name suggests, on these supplies, VAT will be charged at 0%. The reason why zero-rated supplies are included under the taxable supplies bracket is to enable businesses to claim input Vat deduction on it. In simple words, you will be allowed to claim the VAT paid on the purchases though you will not be charging the VAT on your sale.

Read more on Zero-Rated supplies in Oman VAT

Know more about Oman VAT

Introduction to Oman VAT, Who Should Register Under Oman VAT?, VAT Registration Guide in Oman, , VAT Registration Deadline in Oman, VAT Invoice in Oman, Exempt Supplies in Oman VAT, Zero-Rated supplies in Oman VAT, What is VAT and How does it work?, Business Benefits of Voluntary VAT Registration, How to Calculate VAT in Oman?, What are the Taxable Goods and Services Under VAT in Oman?, How does VAT affect Omani businesses?Stay VAT Compliant with TallyPrime’s Amazing Capabilities, What Are the Benefits of Applying VAT in Oman?, How is Introduction of VAT going to Affect Oman Economy?

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