Following the issuance of Royal Decree No. 121/2020, Oman published its new VAT Law in the Official Gazette on 18 October 2020 (“Oman VAT Law”). VAT will be imposed in Oman at the standard rate of 5% in accordance with the unified GCC VAT Agreement effective from 16 April 2021, making Oman the fourth GCC country to implement VAT after the United Arab Emirates (“UAE”), Kingdom of Saudi Arabia (“KSA”) and Bahrain.
According to the Oman VAT Law, the VAT regulations, which are expected to contain the detailed application of the law, will be published within six months of the effective date of the law (i.e. by 15 October 2021).
How does it affect me?
Based on our experience of assisting clients with VAT implementation in the UAE, KSA and Bahrain, businesses typically require between three and six months in order to be ready for VAT. Given that there are approximately six months remaining for the implementation of VAT in Oman, businesses should begin their preparation for VAT immediately. The key areas that you need to focus on to implement VAT within your business are as follows:
What should I do next?
Our award-winning Tax team are here to help. With their expertise and significant experience of VAT implementation in the UAE, KSA and Bahrain, across all industry sectors, they are well placed to assess the impact of VAT on your organisation and assist with your VAT requirements in Oman.