The application of Value Added Tax will be revolutionary for the country as it will not only benefit the growth of the economy but will also support the progress of the country as a whole. This would prove to be one of the critical steps that the state takes to expand its economy. Oman would turn out to be the fourth member of the Gulf Cooperation Council (GCC) to implement VAT in the single Unified VAT Agreement.
What is VAT?
VAT is a general consumption tax that is charged on dutiable goods and services that are bought and traded in Oman comprising the import of goods and services. It is taxed and collected at each phase of the supply chain right from the producer’s buying of raw materials to a seller’s sale of an end-product to a customer.
Omani businesses act as tax collectors for the Sultanate of Oman and are assigned with the duty of charging, collecting, and remitting the tax to the government. Companies need to register for VAT if they happen or expect to meet a yearly deliveries threshold.
Benefits of applying VAT in Oman?
Implementing VAT in Oman is said to have a progressive impact on its growth and global competitiveness and will help in building a defensible knowledge-based economy for upcoming generations. Below are some of the most vital benefits of practicing VAT in Oman:
Entitled to claim input VAT reduction
Input VAT is the tax abided by the taxable person in respect of the products or services provided to him or imported to conduct the activity. The tax unpaid and payable by any chargeable person for any tax period will be figured as the excess amount, of the overall value of output tax less than the complete value of input tax-deductible for that phase. The taxable person can claim the input tax deduction in 3 years from the date of an effective tax invoice.
Reliability and business status
As VAT registration number is to be exhibited on business documents, compulsory, such statements which offer trustworthiness and authorization of businesses. With an appropriate certification in place, businesses seem well recognized and firms would desire to do business that is trustworthy.
With the implementation of VAT, industries will need to ensure that they are maintaining the precise records for at least 5 years for submitting for FTA upon request. This not only confirms complete compliance but also gives the actual picture of the business’s economic circumstance.
Now the next plan for you would be to make your industry ready for VAT execution and can be done by selecting a business management software like Tally Prime VAT, which allows you to be VAT-ready quickly.