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Who Must Register for VAT in Oman

Oman has charged value added tax since 16 April 2021, under the VAT Law issued by Royal Decree 121/2020. The Tax Authority runs the Oman VAT system, and most goods and services carry the standard rate of 5 percent. VAT is self-assessed, which means no one will warn you when your business crosses the line. This guide walks through Oman VAT registration as the law requires it, from the first sales test to your first return.

The mandatory threshold is OMR 38,500. You must register once your taxable supplies pass this figure over a year. The amount is set by a Tax Authority decision on the registration thresholds, issued under Article 55 of the VAT Law.

The voluntary threshold is OMR 19,250. You may register once your supplies or your costs that carry VAT pass this figure over a year. This suits a new company that spends heavily on setup before it earns much, because once registered it can recover the VAT paid on those costs.

Two rolling tests decide the question. First, add up the current month and the previous 11 months. Then estimate the current month and the next 11 months. If either total passes OMR 38,500, you must register, so run both tests at the end of every month.

Count your sales taxed at 5 percent and at 0 percent, but leave out any sale of a capital asset. Add purchases taxed under the reverse charge and supplies made within the GCC. Exempt sales do not count, and a business that only makes exempt supplies cannot register at all.

Documents to Prepare Before You Apply

Article 120 of the VAT Executive Regulations lists what an application must contain. It pays to gather everything before you open the portal, because the Tax Authority's review period only starts once your file is complete.

Company and activity details. You need the general details of the applicant and a short description of each activity the business carries out.

Existing registration numbers. Have your commercial registration number ready, plus any income tax, excise tax or customs number you already hold. If you are still at that stage, our guide on how to get and renew a commercial registration in Oman explains the first step.

Sales and cost figures. Give your actual or expected yearly supplies, and your actual or expected yearly expenses. The regulations ask for fair estimates that take account of past sales and signed contracts.

Bank account details. The application needs the account that will pay tax and receive refunds. Most owners open this account first, so read how to open a corporate bank account in Oman if you have not done so yet.

Two special cases need extra papers. Businesses working under a customs suspension must attach their customs documents, and businesses inside a special zone must show proof of that.

Step by Step on the Tax Authority Portal

Businesses with a commercial registration apply online through the Tax Authority portal. Those without one fill in a form from the Tax Authority website and send it by email instead.

On the portal, you log in, choose Taxpayer Registration, and enter your commercial registration number. You then pick Value Added Tax Liability Registration from the list and press continue. Next, you mark your main activity and the date it started, and add any other activity you carry out.

Save a draft once the fields are filled, then upload your supporting papers. The Tax Authority takes no action on a draft that has not been submitted, so check that you pressed submit. Once the file is approved, you print the decision and then the VAT certificate from the e-services page.

The certificate shows your tax number and the date your registration takes effect. You must display a copy where you do business, and quote the tax number on every invoice and return.

Oman VAT Registration: Deadlines and Effective Dates

You have 30 days to apply. Under Article 110 of the Executive Regulations, a business based in Oman must apply within 30 days of meeting either of the 12-month tests.

The Tax Authority has 15 days to decide. The clock starts when it receives a complete file. If it does not reply within that time, the application counts as rejected, so follow up early.

Mandatory registration can start before your file is approved. Under the same article it takes effect on the first day of the month after the month you crossed the line, unless the Tax Authority sets another date in the certificate. Voluntary registration starts on the first day of the month after you apply, or on a later date the Tax Authority chooses.

Here is a simple example. Say your rolling total passes OMR 38,500 at the end of March. You must apply by the end of April, and your registration then normally takes effect from 1 April, so VAT is due on sales from that date. The duties carry on after approval too, since you must report any change to your registered details within 30 days.

Rules for Foreign and Non-Resident Businesses

The thresholds only protect businesses based in Oman, and Oman VAT registration rules for foreign sellers are stricter. Under Article 57 of the VAT Law, a non-resident that makes taxable supplies here must register whatever its turnover.

Timing depends on where the business is based. A business from another GCC state that applies VAT has 30 days from meeting the Article 55 tests. A business with no base in the GCC must apply 20 days before the start of the month of its first supply.

A local contact is required. A non-resident must name a responsible person who lives in Oman, or appoint an approved tax agent. The agent must be registered for VAT here and hold a written agreement, and the Tax Authority decides on the request within 30 days.

A bank guarantee is the fallback. Where no local agent is possible, the Tax Authority allows direct registration with a related person named as the contact, backed by a guarantee. It must cover at least 5 percent of yearly taxable supplies and stay valid for one year.

Many foreign owners avoid these steps by setting up a local company instead. Our company formation services in the Sultanate of Oman cover that route from start to finish.

After You Register: Returns, Invoices and Records

Returns are filed every quarter. Each tax period lasts three months, starting in January, April, July and October. Under Article 72 of the VAT Law, you file and pay within 30 days of the end of each quarter, even when nothing is due. The Tax Authority's VAT return filing guide explains each box on the form.

You pay the gap between output and input tax. You charge 5 percent on standard sales and deduct the VAT you paid on business costs. In the Tax Authority's own example, sales of OMR 150,000 create OMR 7,500 of output tax. Purchases of OMR 50,000 carry OMR 2,500 of input tax, so the business pays OMR 5,000.

Refunds and records have their own rules. You can ask for a refund above OMR 100, and the Tax Authority normally decides within 30 days and pays within 15 more. Keep invoices, books and customs papers for 10 years after the end of the tax year, or 15 years for real estate.

Electronic invoices become compulsory in 2027. Decision 189/2026, published on 9 August 2026, changed the Executive Regulations so that tax invoices must be electronic. Businesses with yearly supplies above OMR 5 million must comply from 1 April 2027, and all others from 1 October 2027. A PDF or scanned invoice sent by email will no longer count. You can follow the rollout on the Tax Authority's e-invoicing page.

Penalties for Late or Missed Registration

The VAT Law treats a deliberate failure to register as a crime. Article 101 sets a fine of OMR 5,000 to OMR 20,000, prison of one to three years, or both.

The Executive Regulations add fines of their own. A late return, or a certificate that is not on display, can cost OMR 500 to OMR 5,000. Declaring less tax than you owe can bring a penalty of 1 to 25 percent of the difference, and proven evasion can cost 300 percent of the missing tax.

The Tax Authority can also register a business itself when it fails to apply. In that case it has 10 years, rather than the usual 5, to assess the tax for the periods that were missed.

Frequently Asked Questions

Can a new company register before it starts trading?

Yes, if its costs that carry VAT, actual or expected, pass the voluntary threshold of OMR 19,250. It can then recover the VAT on its setup costs.

Do I charge VAT on exports?

Exports of goods and services outside the GCC are zero-rated when the export conditions are met. You charge 0 percent but can still recover your input tax.

Which supplies are exempt?

Article 47 of the VAT Law exempts financial services, healthcare, education, bare land, the resale of homes, local passenger transport and home rentals. Exempt sales carry no VAT, and you cannot recover the VAT on the related costs.

Can I cancel my registration later?

You must apply to cancel if you stop trading or your supplies fall below OMR 19,250. You may choose to cancel if they fall below OMR 38,500 but stay above OMR 19,250.

City Squares is an authorised agent of the Ministry of Commerce, Industry and Investment Promotion, based in Muscat. Through our post company formation services in the Sultanate of Oman, we help businesses prepare and file their VAT registration. VAT rules and thresholds change by decision, so confirm the current figures with the Tax Authority before you commit.