Oman to implement VAT from Friday

Value Added Tax (VAT) on a wide variety of goods and services will comes into force across Oman from tomorrow (Friday).

Only businesses and organisations with annual supplies valued over RO1 million and duly registered with the Tax Authority are liable to charge and levy VAT, an Oman Daily Observer report said quoting experts.

Mid-size and small businesses will be progressively brought into the VAT framework based on a schedule published by the authority.

A significant proportion of food items are zero-rated for VAT. Consumers can, however, expect a five per cent levy on other commodities and services, including motor fuels, telecom services and electricity and water, it said.

A ministerial decision has clarified that the zero rate will also apply to medicinal supplies and equipment; herbal medicines; and biological, health, and food preparations for medical purposes.

Also exempt from VAT are financial services supplied by banks and financial institutions licensed by the Central Bank of Oman or any of the competent authorities. However, VAT is liable to be charged where payment is as a fee, commission or commercial deduction, according to the Tax Authority.

Source: http://www.tradearabia.com/news/BANK_381293.html