Who Should Register Under Oman VAT?

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Yarab A, Feb-24-2021

16th April,2021 is the day on which Oman VAT is expected to be implemented. With VAT being an indirect tax, businesses will be entrusted with the responsibility to levy, collect, and remit the tax to the government.  To levy VAT, the businesses need to register with Oman VAT authorities and only then, they are authorized to charge VAT on the taxable supplies. Now, the important question is “Who should register under VAT? Should all businesses that are making supplies be registered?

The answer is ‘No’.

 Oman VAT Law and tax authorities have issued guidelines that prescribe the businesses responsible to register under Oman VAT. Let’s understand what type of business should register.

Type of business who should register under Oman VAT

The Oman VAT law mandates every person who conducts economic activity and has a place of residence in the sultanate, should apply for VAT registration. In other words, any person who meets the following conditions should register under Oman VAT.

  • Has a place of residence in Oman
  • Conducts a commercial, industrial, professional, or other activity in the Sultanate
  • The annual supplies exceed or is expected to exceed the registration threshold as prescribed by the law
  • In the case of a non-resident, businesses should register regardless of the value of supplies made, if they are obligated to pay tax on the supplies they make.

Now, that we know the persons who are required to register, not all of them need to necessarily register. Only those businesses crossing the defined annual supplies turnover threshold are liable to register under VAT.

Based on the registration threshold, a business will either be:

  • Mandated to register or
  • As an option, a business can apply for voluntary registration or
  • Seek exemption from VAT registration.
 Read VAT Rate Structure in Oman

Who should Mandatorily register under Oman VAT?

All the businesses who have a place of residence in Oman and whose value of supplies in the previous 11 months and the current month have exceeded 38,500 OMR should mandatorily register under Oman VAT.

Also, if the businesses anticipate that the total value of supplies in the current month and the next 11 months will exceed the mandatory registration threshold of OMR 38,500, then they too have to register under Oman VAT.

Those businesses, who do not have a place of residence in Oman, will have to compulsorily register under VAT irrespective of the registration threshold.

Mandatory Registration in Oman VAT

Type of Business

Registration Threshold Conditions

Resident

Value of Supplies exceeds

OMR 38,500

12 Months Period (Current Month + Previous 11 Months)

Anticipated to exceed in the current month and the next 11 months

Non Resident

Threshold limit is not applicable

Compulsorily registration under VAT irrespective of the threshold

Who can Voluntarily register under Oman Vat?

Businesses who are not required to mandatorily register under VAT, are given an option to voluntarily apply for VAT registration. Business can voluntarily register if the annual supplies or the taxable expenses incurred is not less than voluntary registration thresh­old. The voluntary registration threshold is 19,250 OMR which is exactly 50% of the mandatory registration threshold.

Voluntary VAT Registration in Oman

Value of Supplies or taxable business expenses exceed 19,250

12 Months Period (Current Month + Previous 11 Months)

Anticipated to exceed in the current month and the next 11 months

Who are exempted from VAT registration in Oman?

The businesses whose annual value of supplies is below the voluntary registration threshold of 19,250 OMR are not allowed to register under Oman VAT. In other words, businesses with annual supplies below 19,250 OMR are exempt from VAT registration in Oman.

Also, those businesses who are engaged in making only zero-rated supplies may request for a VAT registration exemption.

Now that you know who should register, read VAT Rate in Oman to know more about the tax structure and exemptions.

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