No dealings with unregistered taxpayers in Oman

The Oman Tax Authority (OTA) has recently issued a ‘taxpayer specific’ notification emphasizing not to have any dealings with any Establishments (including permanent establishment of a foreign company) and Companies in Oman which are not holding a valid tax card in Oman.

Such Establishments and Companies as per the notification would be considered in violation of the applicable Laws and By-Laws in the Sultanate of Oman. This notification (uploaded on the respective taxpayer’s portal) is effective from its issuance date. The OTA shall carry out cross examination to ensure its implementation by the taxpayers in Oman.

In summary:

  • For taxpayers dealing with Establishments (including permanent establishment of a foreign company) and Companies in Oman - Obtain a copy of valid tax card from each such Establishment and Company in Oman.
  • For taxpayers dealing with non-residents in Oman, obtain the following documents (though not specified in such notification) that may assist in compliance with the above notification:
    • A valid Tax Residency Certificate (TRC) issued by the non-resident’s Tax Authority duly attested by Ministry of Foreign Affairs or Oman embassy in the non-resident country. 
    • No PE declaration certificate duly signed and stamped by the non-resident.

Penalty for non-submission of Value Added Tax (VAT) return

The OTA has announced that taxpayers who have not submitted VAT returns for the tax quarter ending June 2021 within the due date (i.e. 30 July 2021) are required to submit these by 23 September 2021, failing which penalties of up to Omani Rial 5,000 will be levied by the OTA.

VAT Guide for the Real Estate sector

The OTA has released a VAT Guide for the Real Estate sector providing guidance on the applicability of VAT to the Real Estate sector in Oman. It specifically clarifies the following:

  • VAT treatment in case of sale or lease of real estate owned by individuals
  • Credit or refund eligibility of input tax incurred on construction costs
  • VAT registration obligation on a non-resident providing real estate related services to a non-taxable person in Oman
  • VAT treatment of retention money or withheld payments