Oman VAT Guide for 2026: Rates, Registration & Filing

Oman applies a standard 5% VAT to most goods and services, including digital supplies — one of the lowest standard rates worldwide. VAT took effect on 16 April 2021.[1] A 0% rate covers exports, international transport, and basic food, and some supplies such as healthcare, education, and residential real estate are exempt.[1] The tax authority is the Oman Tax Authority (OTA).[1]

Registration is mandatory when annual taxable supplies exceed OMR 38,500, with voluntary registration available from OMR 19,250 [1]. Non-resident businesses making taxable supplies in Oman must register regardless of turnover and account for 5% VAT on digital and electronic services supplied to Oman customers, appointing a tax representative where required [1].

VAT returns are filed quarterly through the OTA e-services portal, with the return and payment due within 30 days of the end of each quarter.[1] Oman is introducing mandatory e-invoicing under its Fawtara system, a Peppol-based five-corner model. The OTA has confirmed a phased rollout: Phase 1 begins August 2026 for the first 100 large VAT-registered companies; Phase 2 begins February 2027 for all large VAT-registered companies; Phase 3 begins August 2027 for all remaining VAT-registered taxpayers, including SMEs; Phase 4 covers government institutions and entities, with the year still to be announced. [1]

Exports, international transport, basic food, medicines, oil and gas, and investment metals are zero-rated. Financial services, healthcare, education, local passenger transport, and residential real estate are exempt.[1] SaaS and digital services supplied to Omani customers are taxable at 5%.[1]

Oman has no US-style resale certificates. A VAT-registered business recovers the input VAT it pays on purchases and imports by deducting it from output VAT on its return, provided the purchases support taxable supplies and valid tax invoices are held [1]. Net VAT payable equals output VAT minus deductible input VAT.

Late payment accrues additional tax of 1% per month on the unpaid amount. Failure to file a return carries an administrative penalty of OMR 500 to OMR 5,000.[2] Late registration exposes a business to penalties and extends the OTA's assessment window from five years to ten.[2]

The Oman Tax Authority reviews returns and can open audits, request records, and issue assessments where VAT is under-reported [1]. A taxpayer who disagrees with an assessment may object to the Oman Tax Authority and, if unresolved, escalate through the grievance and appeal channels set out in the VAT Law (Royal Decree 121/2020) and its executive regulations [1].

• [1] Oman Tax Authority, VAT Taxpayer Guide, https://taxoman.gov.om

• [2] Oman Tax Authority, Ministerial Decision 65/2021 list of food products subject to VAT at zero percent, https://taxoman.gov.om

Verified July 2026 against Oman Tax Authority guidance.