The Oman Tax Authority (“OTA”) issued Decision No. 521/2023 (“Decision”) amending the Oman Value Added Tax (“VAT”) Executive Regulations (“Executive Regulations”) to the Oman VAT Law. The Decision was published in the Official Gazette on 29 October 2023 and became effective on 30 October 2023.
To access the Decision issued by the OTA in Arabic click here.
The Decision specifies additional cases and conditions for VAT refund. The summary of the amendments is as follows:
# | Additional cases for VAT refund | Conditions/process for refund |
1. | VAT paid by non-profit charitable organizations on purchase of goods and services directly related to charitable activities | a. The value of refund claimed should not be less than OMR 15. b. The applicant should submit a refund application in the prescribed form for each tax period i.e., calendar quarter. c. The applicant should also submit the tax invoice(s) or simplified tax invoice(s) along with evidence of payment of the VAT claimed as a refund from the applicant’s bank account. d. The OTA should decide on the refund application within thirty days from the date of submission of all the documents, otherwise the application will be considered rejected. e. The OTA should refund the approved amount, in whole or in part, to the applicant within fifteen days from the date of notification of the refund decision. |
2. | VAT paid on import of goods from a non-taxable person in excess of the VAT due | a. The value of refund claimed should not be less than OMR 15. b. The applicant should submit a refund application in the prescribed form for each tax period i.e., calendar quarter. c. The applicant should also submit evidence of amending the customs declaration and refund of customs duty (if paid). d. The OTA should decide on the refund application within thirty days from the date of submission of all the documents, otherwise the application will be considered rejected. e. The OTA should refund the approved amount, in whole or in part, to the applicant within fifteen days from the date of notification of the refund decision. |
3. | VAT paid on import of goods for re-export in accordance with the Common Customs Law where customs duty paid (if any) is refunded | a. The value of refund claimed should not be less than OMR 15. b. The applicant should submit a refund application in the prescribed form for each tax period i.e., calendar quarter. c. The applicant should also submit evidence of VAT paid and refund of customs duty (if paid) along with the customs declaration for re-export. d. The OTA should decide on the refund application within thirty days from the date of submission of all the documents, otherwise the application will be considered rejected. e. The OTA should refund the approved amount, in whole or in part, to the applicant within fifteen days from the date of notification of the refund decision. |
This is the second amendment to the Executive Regulations since its implementation on 16 April 2021. The last amendment (which was a year ago in October 2022) introduced a host of changes, unlike this one which focuses only on refunds. This is a welcome relief for charitable organizations and certain taxpayers.
While taxpayers assess their eligibility for VAT refunds in any of the above cases, it will be necessary to ascertain whether the OTA will only entertain refund applications for the future or also for the past.
KPMG has a dedicated team of experienced indirect tax specialists based in Oman supported by a larger, experienced regional team. If you need assistance with VAT or other indirect tax related matters in Oman, please reach out to your advisors at KPMG or the contacts mentioned below.
