Oman Introduces VAT System

Andrew Decker
April 20, 2021

The Sultanate of Oman has imposed a Value Added Tax from 16 April 2021. The VAT system is scheduled to be implemented in phases, with businesses required to register for VAT at different points over the next year based on their turnover.

Turnover Mandatory Registration Deadline Effective Date of Registration
Greater than 1,000,000 OMR March 15, 2021 April 16, 2021
500,000 OMR to 1,000,000 OMR May 31, 2021 July 1, 2021
250,000 OMR to 499,999 OMR August 31, 2021 October 1, 2021
38,500 OMR to 249,999 OMR February 28, 2022 April 1, 2022

VAT will be imposed at a rate of 5% on supplies of goods and services sourced to Oman, as well as on imports. Business to consumer supplies of most services are to be sourced to the supplier’s residence. However, several exceptions exist such as supplies of electronic services and telecommunications (which are sourced to Oman if used in Oman) or supplies of restaurant services. VAT registered businesses must file returns through an electronic portal on a quarterly basis.

The following supplies are subject to a zero-rate of VAT:

  • Specified food items listed as listed in VAT regulations
  • Specified medicines and medical equipment
  • The supply of investment gold, silver, and platinum
  • Supplies of international and intra-GCC transport of goods or passengers and supply of services in connection with this transport
  • The supply of air, sea and land means of transport that are designated for the transportation of passengers and goods for commercial purposes and the supply of goods and services related to transport
  • The supply of rescue planes and rescue and assistance boats
  • The supply of oil, oil derivatives and natural gas

The following supplies are exempt from VAT:

  • Financial services
  • Healthcare services and related goods and services
  • Educational services and related goods and services
  • Undeveloped land (bare land)
  • Resale of residential properties
  • Local passenger transport
  • Rental of properties for residential purposes

In 2016 the six Member States of the Gulf Cooperation Council (GCC) agreed to implement a 5% VAT in accordance with a common framework. Saudi Arabia and the United Arab Emirates implemented their VAT systems in 2018, with Bahrain following suit in 2019. In July of 2020 Saudi Arabia increased its VAT rate to 15%. Kuwait and Qatar have both announced their intentions to implement VAT in the future, though the exact timeline has not been set.

The framework agreement calls for special rules relating to the sale of goods between GCC Member States. Similar to the EU’s rules for intra-community supplies, such rules have been suspended until more Member States have implemented the framework and the necessary IT infrastructures have been put in place.

Organisations doing business in Oman need to evaluate their VAT liabilities going forward.

Further information about the new measures can be found on Oman’s Tax Authority website:

Take Action

To keep up to date with the changing VAT compliance landscape, download Trends: Towards Continuous Transaction Controls. Follow us on LinkedIn and Twitter to stay up-to-date with the latest regulatory news and updates.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.


Andrew Decker

Andrew Decker is a Senior Regulatroy Counsel at Sovos Compliance. Within Sovo’s Regulatory Analysis function, Andrew focuses on international VAT and GST issues and domestic sales tax issues. Andrew received a B.A. in Economics from Bates College and J.D. at Northeastern University School of Law. Andrew is a member of the Massachusetts Bar.
Share This Post
Share on facebook
Share on twitter
Share on linkedin
Share on email

E-Invoicing Compliance EMEA
May 20, 2022
What Businesses Need to Know About the Romanian E-Transport System

Romania is introducing a mandatory e-transport system from 1 July 2022 to monitor the transport of certain goods in the national territory, an initiative that will operate in parallel with the newly launched continuous transaction controls (CTCs) system for e-invoicing. This means that in a little over a month’s time, the issuance of an e-transport document […]

North America ShipCompliant
May 18, 2022
Marketing Strategy 2022: Key Elements for Successful Wine e-Commerce

By Chloe Cristallini, Marketing Manager for Bloom Studio Recently, one of our webinar attendees asked, “What advice would you give someone who is first starting to sell alcohol DtC, or who wants to grow their DtC channel?” Buying a bottle of wine should be as easy for people as buying a pair of shoes. Other […]

May 18, 2022
Trends in VAT Audits – EU Focus on E-commerce

Continuing our series on VAT audits, we take a closer look at the trends we’ve seen emerging in the activities of the EU Member States’ independent tax administrations throughout the European Union. In a recent report from the European Commission (EC) specific guidelines were published not only on best practices but also on how EU […]

May 18, 2022
Deep Dive – Insurance Premium Tax in France

France is known for its challenging Insurance Premium Tax (IPT) filing system. Understanding which tax authorities you need to register with, file with and talk to when you have questions is essential to meeting your business’s IPT compliance obligations. In this blog, we identify France’s IPT tax authorities and explain what makes IPT so different […]

EMEA VAT & Fiscal Reporting
May 17, 2022
VAT for Virtual Events – Exemption, Hybrid Events and Reduced Rates

In a recent blog, we considered the upcoming changes to the VAT treatment of virtual events. Today, we will consider some of the issues that may arise. Exemption from VAT Many hosts currently use the available educational or fundraising exemptions, especially where the delegates are private individuals without the right of deduction, e.g., doctors. For […]