Oman Tax flash: Oman Tax Authority releases the draft data dictionary for e-invoicing

a.     Business Terms set out the use cases (i.e. document types for which e-invoicing is mandatory) and specify the content and fields applicable to each use case.

b.     These terms also provide distinct content/fields such as invoice details, seller/buyer details, amounts, Value Added Tax (“VAT”) etc., that are either mandatory, optional or conditional, depending on the document type.

a.     Business Rules set out validations and compliance requirements for Business Terms. They may require identifiers, enforce data formats, or mandate field presence based on the transaction type.

b.     These rules also help maintain data integrity, such as positive monetary amounts, correct date formats, matching line-item totals, etc.

a.     Code Lists set out standardized codes and permissible values for defined fields such as invoice types, currencies, VAT categories, and countries.

b.     These lists help ensure data consistency and reduced errors, and support smoother integration with Accredited Service Providers (“ASP”) and the OTA.

a.     E-invoicing will apply to all transaction types: standard rated, zero rated, exempt and out-of-scope supplies.

b.     E-invoicing will apply in different supply categories: Business-to-Business (B2B), Business-to-Consumer (B2C) and Business-to-Government (B2G).

c.     Issuance of e-invoices for B2C transactions will be challenging, especially for sectors where transactions are voluminous. Issuance of e-invoices for B2B and B2G transactions could also be challenging considering the commercial reality of conforming to specific formats, obtaining customer approvals before issuance of invoices, etc., often also leading to process changes.

d.     Taxpayers should keep track of future guidance from the OTA to understand the compliance requirement and evaluate their processes, tax positions and capabilities of their ERP/billing systems.

a.     53 data fields will be mandatory for generating a standard tax e-invoice with 66 additional data fields that may be required if certain conditions are met.

b.     46 data fields will be mandatory for printing a standard tax e-invoice (human-readable) with 50 additional data fields that may be required if certain conditions are met.

c.     This represents a significant increase in data fields compared to the current Oman VAT legislation which requires only 18-20 fields on a standard tax invoice. For this, taxpayers will need to ensure that either all these data fields exist in their ERP/billing systems in the prescribed formats, or find system workarounds to populate these data fields outside their ERP/billing systems (such as data warehouse, cockpit, etc.) in the prescribed formats.

a.     Business rules have been defined for 8 document types: tax invoice, simplified invoice, prepayment invoice, simplified prepayment invoice, debit note, credit note, simplified debit note and simplified credit note.

b.     The Code List also includes 14 specific transaction types. The OTA in its workshop has clarified that the business rules for these transactions will follow the business rules defined for the 8 document types mentioned above.

c.     Taxpayers will need to ensure that either all these data fields exist in their ERP/billing systems in the prescribed formats or find system workarounds to populate these data fields outside their ERP/billing systems (such as data warehouse, cockpit, etc.) in the prescribed formats.

a.     A UUID will be assigned to all documents.

b.     QR Code and Digital Signature will be mandatory for simplified tax invoices. The OTA in its workshop clarified that QR Code and Digital Signature are intended for B2C transactions, and technical guidance on how to comply with these requirements will be issued in due course.

c.     Taxpayers will need to evaluate the capability of their ERP/ billing systems to generate QR Code and affix Digital Signature.

a.     The OTA in its workshop clarified that e-invoices for B2B and B2G transactions are expected to be generated via real time integration with ASP.

b.     For B2C transactions, the OTA is expected to release specific guidance on reporting timelines, including whether batch submissions will be allowed.

c.     Taxpayers will need to ensure that data sets used for e-invoicing purposes are complete, accurate, and timely to enable real-time generation of e-invoices and avoid business disruptions/financial misreporting due to the inability to generate e-invoices.

a.     The OTA in its workshop clarified that e-invoices, once issued, cannot be cancelled.

b.     Only a tax credit note issued through the e-invoicing framework can be used to cancel an e-invoice, with reasons to be selected from the Code List.

c.     Taxpayers will need to ensure compliance with the conditions and timelines prescribed in the Oman VAT legislation for issuance of tax credit notes. Consideration must also be given to how the details of an electronic credit/debit note that relates to a tax invoice generated prior to e-invoicing implementation are validated.

a.     Self-billed e-invoices will be required for import of goods and services.

b.     On import of services, the Oman VAT legislation requires taxpayers to discharge VAT under the reverse charge mechanism. On import of goods, taxpayers are required to pay import VAT in cash at the time of customs clearance, unless an approval for import VAT postponement has been obtained. Currently taxpayers are not required to generate any invoice for imports, and generating self-billed invoices will be an additional compliance requirement.

a.     For transactions that are subject to VAT at zero-rate or exempted, the basis for zero-rating or exemption (as prescribed in the Code List) will be required.

b.     For zero-rated export of services, additional details on the nature/type of exported service (as prescribed in the Code List) will be required.

c.     Taxpayers will need to ensure that the VAT treatment adopted on their supplies, including on export of services where the benefit test needs to be satisfied for claiming a zero-rating benefit, complies with the Oman VAT legislation as well as e-invoicing rules.

a.     A 12-digit item classification identifier will be required on e-invoices involving goods (except in case of simplified tax invoices). The business rules require the item classification identifier to be based on Harmonised Commodity Description and Coding System (“HS”), as defined in the PEPPOL UNTDID 7143 list.

b.     Taxpayers will need to ensure completeness and correctness of this identifier/HS codes in their ERP/billing systems.

a.     Multiple address fields are mandated for the seller and buyer (such as PO box, postal code, location, etc.)

b.     Taxpayers will need to ensure that either all these data fields exist in their ERP/billing systems in the prescribed formats or find system workarounds to populate these data fields outside their ERP/billing systems (such as data warehouse, cockpit etc.) in the prescribed formats.

E-invoice registration

a.     The OTA in its workshop clarified that the existing VAT registration number (VATIN) will serve as the unique electronic address and no separate e-invoicing registration is required.

b.     For VAT Groups, further guidance is expected on unique identifiers. Each member of the VAT Group is likely to require a separate ASP endpoint.