i) Legal framework

The GCC Member States signed the Unified VAT Agreement for the Cooperation Council for the Arab States of the Gulf (“Agreement”). The Agreement specified a common VAT treatment for goods and services, and allowed Member States to adopt certain VAT policies.

Per the Agreement, every state shall issue a national VAT Law that is in line with the provisions of the Agreement. Oman, UAE, Bahrain and KSA have issued their national VAT Laws.

The Sultanate issued its national VAT Law (“VAT Law”) through Oman Sultani Decree No. 121/2020. VAT Law will be effective 180 days from its publication in the Official Gazette. Accordingly, VAT Law effective date is 16 April 2021.

Per article (106) of the VAT Law, every person with a place of residence in the Sultanate, and who undertakes an economic activity before the effective date of the VAT Law must submit a registration application within the timelines set by a decision issued by the Tax Authority's Chairman.

The Tax Authority has issued decision no. (1/2020) determining the Mandatory Registration Threshold and Voluntary Registration Threshold.

ii) Tax Authority (“TA”)