Oman VAT system introduction moves a step closer

Oman plans to implement a VAT system in 2021 and recent legislative developments show that the Gulf state is on track to do so. 

Jul 27, 2020

Oman plans to implement a VAT system in 2021 and recent legislative developments show that the Gulf state is on track to do so.

An exact introduction date for a VAT system has not been publicised but a Royal Decree is expected in September to do so. According to quotes in this Zawya (Gulf news website) article "January, April and July 2021 are all possible dates, but based on discussions with (the Tax Authority), a go-live target will be likely July 2021.”

This original intention for an Oman VAT system was confirmed by Oman's Minister of Commerce and Industry Ali bin Masoud Al Sunaidy during an interview with Bloomberg TV at the 2020 World Economic Forum in Davos at the beginning of the year. 

Since this January gathering in Switzerland, Oman’s draft VAT law has navigated its way along the country’s legislative path. The most recent development has been approval of the draft VAT law by the country’s Majlis Ash’ Shuras, the advisory council of Oman’s lower house, to the Sultanate’s State Council.

Oman VAT system background

Back in June 2016, all six Gulf Cooperation Council (GCC) members states signed the Common VAT Agreement. It was agreed that each GCC Member State would introduce a VAT system at a rate of 5%.

As a result of this agreement, Oman will introduce VAT at a rate of 5%. When it does so it will become the fourth member of the GCC member state to introduce a VAT system: Saudi Arabia, Bahrain, and the United Arab Emirates have already done so. 


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