Recent VAT publications by the Oman Tax Authority

Return Filing Guide (click here)

The Oman Tax Authority (OTA), on 29 June 2021, published on its website guidance to help support taxpayers with their VAT return preparations.

This guide provides a step-by-step approach for preparation, process, review and submission of the return. The guide also provides an example of the VAT return requirements template which outlines the required information that should be added into each field.

Return Form

The guide outlines the format of the VAT return and includes detailed explanations of the information required and the amounts to be reported in each box on the form. The VAT return itself is divided into seven sections:

• Supplies made in Oman (5%, 0%, exempt etc.);

• Purchases subject to the reverse charge mechanism;

• Supplies made to countries outside of Oman;

• Imports of goods (including details of deferred/postponed payments);

• Total VAT due;

• Input VAT credit (5%, 0%, exempt, imports); and

• Net tax liability

Refunds

The guide sets out the process for claiming a net VAT refund, in cases where the VAT return shows a net credit of VAT due to the taxpayer. The taxpayer will have the option to either carry forward a net VAT refund amount or claim a refund.

The form is designed to default to the carry forward option, unless the taxpayer ticks the “I want to be refunded” box on the VAT return. Where a refund is selected, the taxpayer will need to download the “Taxpayer Checklist” from the OTA’s website. The completed checklist, along with all required supporting documents, must be submitted online with the VAT return. It will be important for taxpayers to ensure that all records, invoices, and documents submitted correlate with the amounts reported in the relevant boxes on the VAT return declaration.

The guide notes that the OTA will decide on the refund application within 30 days of receiving “all the relevant details and documents.” The approved full or partial refund will be paid to the taxpayer within 15 days after the date of notification of a decision on the refund request.

Return Revision

Where a taxpayer becomes aware of an error on a return already submitted, the taxpayer may file a revised VAT return within 30 days from the date of discovery of the error or omission. The revised VAT return will be considered as an original return.

Time limits will apply to corrections and revisions: a taxpayer will not be able to revise a VAT return more than three years after the date of submission of the original return or where the OTA has commenced inspection, review, or audit procedures.

List of zero rated food items (click here)

Oman Justice and Legal Affairs has issued Ministerial Decision 65/2021 to expand the scope of zero-rated food items from 93 to 488 commodities. The full list of the 488 items consist with their HS codes currently identified as zero-rated is available on the official website (Arabic).

The list of basic food items agreed between the GCC member states contains only 94 commodities, the expansive list of 488 commodities published by the OTA escalates the complexities for businesses in F&B sector.

Zero rating of supply of medicines (click here)

Oman Justice and Legal Affairs has issued Ministerial Decision 59/2021 to define certain medicines and medical equipment subject to VAT at zero rate in the Official Gazette.

The supplies of medicines, herbal medicines, biological preparations, health preparations, food for medical use, and medical equipment are subject to value added tax at zero rates provided there is a release permit is issued by the Ministry of Health in accordance with the customs code.

Tax Grievance Committee (click here)

Decision Number 57/2021 regulates the working of the Committee that is responsible for adjudicating Income Tax, Value Added Tax and Excise Tax related “grievances”, the second stage of disputes following objections. This Decision also repeals and replaces the Regulations governing the work of the Income Tax Committee issued by Ministerial Decision No. 52/2004.

Of particular note is that the applicant must submit the grievance to the Committee:

• In three copies

• In Arabic

• Along with (certified) copies of all supporting papers and documents

• Within (45) forty-five days of the date of notification or date of knowledge of the decision to be appealed against or date of expiration of the period prescribed for adjudicating the objection where the decision is not issued

The Committee is required to observe the standards and general principles of litigation procedures and hearings in concluding the hearing.

The applicant has the right to access the reply submitted by the Oman Tax Authority and appoint a representative, attorneys, accountant or auditor duly licensed by law to practice the profession of Accountancy and Auditing.