Any person who carries on an activity and is resident in the Sultanate must register with the Tax Authority for VAT purposes once the value of its supplies exceeds the mandatory registration threshold of OMR 38,500, and may register voluntarily once its supplies or expenses exceed the voluntary registration threshold of OMR 19,250 in value.
The Mandatory Registration Threshold
The law provides that every person who carries on an activity and is resident in the Sultanate must register with the Authority in either of two cases: if the total value of the supplies it made at the end of any month, together with the eleven months immediately preceding it, exceeds the mandatory registration threshold, or if the total value of its expected supplies over the following eleven months is expected to exceed that threshold. The Tax Authority has set the value of the mandatory registration threshold at OMR 38,500 in supplies. The value of supplies for this purpose is calculated excluding the value of capital asset supplies.
The Voluntary Registration Threshold
Any person resident in the Sultanate who makes taxable supplies, without being required to register, may apply for voluntary registration if the value of its supplies or expenses exceeds the voluntary registration threshold. The Tax Authority has set the value of this threshold at OMR 19,250 in supplies or expenses.
Special Registration Cases
- Every person who is not resident in the Sultanate must register with the Authority from the date on which it becomes liable to pay the tax, regardless of any minimum supply value.
- Two or more persons may register with the Authority as a single tax group under the conditions set by the executive regulations, and the group is treated as an independent taxable person.
- The Authority will register, on its own initiative, any person required to register who fails to do so within the legally specified deadline.
The Effect of Exceeding the Threshold on the Registration Obligation
Setting and amending the mandatory and voluntary registration thresholds is done by a decision of the Chairman of the Tax Authority after the approval of the Council of Ministers, meaning both thresholds are subject to periodic review. It is therefore advisable to track total actual and expected supplies on a rolling monthly basis, to identify the moment registration becomes a legal obligation rather than merely an option.
Legal References
- Royal Decree No. 121/2020 Promulgating the Value Added Tax Law No. 121 of 2020 — Article 55
- Royal Decree No. 121/2020 Promulgating the Value Added Tax Law No. 121 of 2020 — Article 57
- Royal Decree No. 121/2020 Promulgating the Value Added Tax Law No. 121 of 2020 — Article 61
- Tax Authority: Decision No. 1/2021 Setting the Mandatory and Voluntary Registration Thresholds No. 1 of 2021 — Articles One and Two.
For questions about your specific situation, you can ask the Oman Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.