Omani Businesses Are Warned to Not Apply VAT before Due Date
Sunil Ambalavelil- at Trade and Commodities
- on Nov 7, 2021 - 09:03
Following consumer complaints, which surfaced as a result of the Value Added Tax being applied by businesses before the stipulated dates, the tax department has urged businesses to refrain from it. The consumer complaints sprang from some SMEs allegedly implementing the tax before their categories should implement the same, as per the new tax laws brought in.
Any business or establishment, regardless of their size, can register themselves on the VAT scheme. However, it has to be noted that the scheme is implemented phase by phase, with different deadlines for each category of business to start applying the same to their entities. As of now, the entities with a turnover of over 1 Million Riyals have to apply VAT at the rate of 5 per cent on their VAT-eligible goods and services. This applies from April 16, 2021 and the implementation has begun in the sultanate.
However, as per the stipulated schedule, Category B entities, with a turnover starting from 500,000 RO to less than 1 Mn RO, come next starting from July 1, 2021. This category is followed by Category C entities, whose range is from 250,000 RO to less than 500,000 RO, starting from October 1, 2021. Category D follows, with a range across 38,500 to 250,000 RO, who need to start only by April 1, 2022. Tax Authority has warned the businesses against implementation before the due dates. The consumer protection watchdog has also stepped up surveillance following the complains to ensure that VAT is implementation follows the timelines set by the law.