US Tax Newsroom

 Tax News Update    Email this document    Print this document  

October 16, 2020

Oman introduces VAT law

On 12 October 2020, His Majesty Sultan Haitham Bin Tariq issued Royal Decree No. 121/2020 to introduce Value Added Tax (VAT) in Oman at the rate of 5%. The law will come into force in April 2021.

The Gulf Cooperation Council VAT Framework Agreement stipulates that businesses with taxable turnover in excess of US$100,000 must register for VAT, and businesses with taxable turnover between US$50,000 and US$100,000 have the option of registering for VAT. Oman will adopt a phased introduction with an initial focus on larger businesses.

Businesses that have not yet begun their VAT implementation projects will need to start preparing if they are to be compliant when VAT is implemented. Being a transactional tax, the introduction of VAT is expected to have a wide impact across the business. Some of the key areas that businesses should look at to assess their readiness for VAT include:

  • VAT treatment of sales and purchases
  • Contracts and pricing
  • Accounting systems
  • Invoicing
  • VAT return preparation


For additional information with respect to this Alert, please contact the following:

Ernst & Young LLC, Muscat

  • Ahmed Amor Al-Esry
  • David Stevens
  • Alkesh Joshi
  • Mitul Patel
  • Nikhil Grover
  • Lamya Al Ghafri

Ernst & Young LLP (United States), Middle East Tax Desk, New York

  • Asmaa Ali


PDF version of this Tax Alert


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 1996 – 2022, Ernst & Young LLP


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


EY US Tax News Update Master Agreement | EY Privacy Statement