VAT return filing guidance has been released

Following the implementation of Value Added Tax (VAT) in Oman on 16 April 2021, many taxpayers now face the task of pulling together their first VAT filing due (for most) on 30 July 2021. On 29 June 2021, the Oman Tax Authority (OTA) published their VAT return filing guidance to help support taxpayers with their VAT return preparations. The document provides a step-by-step overview of the OTA’s VAT compliance expectations, particularly in relation to the application for net VAT refunds.  

The VAT return form, template and guidance are now available on the OTA’s website available here.  We are anticipating that the OTA will soon release further guidance on how to settle and pay the net VAT due which will require the VAT filer to add a reference on relevant bank transfer to VAT identification numbers.

VAT return form

The guide outlines the format of the VAT return and includes detailed explanations of the information required and the amounts to be reported under each box of the form. The VAT return itself is divided into seven sections:

  1. Supplies in the Sultanate of Oman (5%, 0%, exempt etc.)                
  2. Purchases subject to the so-called Reverse Charge Mechanism
  3. Supplies to countries outside of Oman                                  
  4. Imports of Goods (including details of deferred/postponed payments)
  5. Total VAT due                    
  6. Input VAT credit (5%, 0%, exempt, imports)
  7. Net tax liability

We understand that a number of fields (VAT amounts on supplies, imports, profit margin scheme, reverse charge mechanism, etc.) are calculated automatically based on the data input by filers. The system also calculates the net VAT position on the filing (either payable or refundable).

  • The guide sets out the process of claiming the net VAT refund – this is essentially where the Output VAT due on sales and revenue items is less than the recoverable Input VAT on costs.
  • The taxpayer will have the option to either carry forward a net VAT refund amount or claim a refund. The form is designed to default to the carry forward option, unless a filer ticks the box on the VAT return that states “I want to be refunded”.
  • Where a refund request is opted for, the taxpayer will need to download the “Taxpayer Checklist” from the OTA’s website.
  • The completed Taxpayer Checklist, along with all required supporting documents, will need to be submitted online with the VAT return. It is important to note that this is where all the records, invoices and documents that tie into the numbers in the various boxes of the VAT return declaration.
  • In line with Oman VAT Legislation, the guide notes that the OTA will decide on the refund application within 30 days of receiving “all the relevant details and documents”. The refund amount approved (fully or partially), as we understand, will be paid to the taxpayer within 15 days from the date of notification of a decision on the refund request.
Correction of VAT returns
  • The guide also sets out how to file revised VAT returns. If a taxpayer becomes aware of an error on a return already submitted, the filer will have the option to file a revised VAT return within 30 days from the date of discovery of the error or omission.
  • The revised VAT return will be considered as an original return.
  • Time limits will apply to corrections and revisions: a taxpayer will not be able to revise a VAT return after 3 years from the date of submission of the original return (or if the OTA has commenced inspection, review or audit procedures).
Record keeping
  • In line with Article 156 of Oman VAT Regulations, the guide stipulates that a VAT registered taxpayer is required to keep appropriate records relating to VAT for audit purposes. This includes any documents used to prepare a VAT return. The information and documents includes:
  1. Any recording process in which VAT taxable transactions are recorded day by day, in the appropriate chronological and sequential order to allow for verification of the accuracy, validity and completeness of these transactions.
  2. Records that monitor the opening of accounts and transactions through the relevant accounts, provided that there is a separate account for each type of supply (taxable or exempt).
  3. Inventory records, where the inventory items, budget, movements and totals are recorded.
  4. Records and documents related to supplies of imported and exported goods and services.
  5. Data related to intra-group or entity movements or supplies of goods and services.
  6. Records and documents related to all Customs transactions.
  7. All documents evidencing taxable supplies at the zero rate – following the rules set out in the Oman VAT Executive Regulations.
  8. All tax invoices and other documents issued.
  9. All tax invoices and other documents received. 

Note: Taxpayers should be also be able to provide the OTA with information on any transactions they have been privy to, including details and information that is “necessary to determine the correct treatment of the supplies”.

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