Oman VAT Essentials for Startups
A plain-language summary of the Oman VAT rules most small businesses ask about. Every point below comes from the VAT Law, its Executive Regulations or Oman Tax Authority (OTA) guidance, and was last reviewed on 12 October 2026. We keep it current, and every point is sourced at the end of the page.
Rates and supply types
- Standard rate: 5%
- Zero-rated supplies: 0%, and the related input VAT can be deducted
- Exempt supplies: no VAT charged and no input VAT deduction
- Out of scope: for example supplies made outside Oman
The zero-rate lists for basic food, human medicines and medical equipment, and veterinary medicines were replaced by new decisions (223, 224 and 225 of 2026) in force from 1 October 2026.
Do you need to register?
- Mandatory registration threshold: OMR 38,500 of taxable supplies
- Voluntary registration threshold: OMR 19,250 (based on supplies or expenses)
- The test runs monthly on a rolling 12-month basis, looking back or forward
- A non-resident making taxable supplies in Oman must register whatever the turnover
- Services you receive from abroad under the reverse charge count towards the threshold
Returns and payment
- The tax period is a calendar quarter
- The return and any net VAT are due by the 30th day of the month after the quarter ends
- When the due date falls on a weekend, file and pay by the last working day before it
- A refund claim needs the Taxpayer Checklist attached, and refunds not claimed within 5 years are lost
- A mistake found after filing should be corrected within 30 days of discovery, and a return cannot be revised more than 3 years after submission
Tax invoices
- A tax invoice is due within 15 days of the supply, or of receiving an advance payment
- It must be in Arabic. English is allowed if you provide an Arabic translation when the OTA asks
- A full invoice shows the words Tax Invoice, dates, a sequential number, supplier and customer details with VAT numbers, description, quantity, amount before VAT, VAT rate, discounts, taxable amount and VAT due
- A simplified invoice is allowed for supplies below OMR 500 excluding VAT. Check the current conditions before relying on it
- Keep all invoices issued and received for at least 10 years
Services from abroad (reverse charge)
When a registered business buys services from a non-resident supplier that is not registered in Oman, the buyer accounts for the 5% VAT itself. The value goes in box 2b of the return, and the same VAT is normally deductible if the services are used for taxable supplies.
Example: a management fee of OMR 2,500 gives reverse-charge VAT of OMR 125. For a fully taxable business the net cash effect is nil.
Payments to non-residents may also raise withholding-tax questions, which are separate from VAT.
E-invoicing is coming
Decision 189/2026 introduces approved e-invoice formats and accredited service providers. As reported by KPMG Oman and the Oman Observer, phase 1 starts on 1 April 2027 for businesses with annual supplies above OMR 5 million, and phase 2 starts on 1 October 2027 for the rest. Check the decision text on the OTA portal before planning around these dates.
Sources and a note on advice
Sources: VAT Return Filing Guide (OTA, 2021), Input Tax Guide (OTA, 2023), Reverse Charge Guide (OTA, 2023), VAT Executive Regulations (Decision 53/2021) as amended, OTA portal news (October 2026).
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Frequently asked questions
The standard VAT rate in Oman is 5%. Zero-rated supplies are taxed at 0% and exempt supplies carry no VAT.
When must a business register for VAT in Oman?Registration is mandatory when taxable supplies reach OMR 38,500, and voluntary registration is possible from OMR 19,250. The test runs monthly on a rolling 12-month basis.
When is the Oman VAT return due?The tax period is a calendar quarter. The return and any net VAT are due by the 30th day of the month after the quarter ends.
Must an Oman tax invoice be in Arabic?Yes. A tax invoice must be in Arabic, and English is allowed if an Arabic translation is provided when the Oman Tax Authority asks for it. It is due within 15 days of the supply or of an advance payment.
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Written by Akram El-Karrar, CPA, from the work we do for startups every week.