Key impacts of the amended VAT Executive Regulations in Oman

09 November 2023 - The Oman Tax Authority (OTA) has issued Decision No. 521 of 2023, amending the Value Added Tax (VAT) Executive Regulations (Executive Regulations). The Ministerial Decision was published in Arabic in the Official Gazette No. 1517 dated 29 October 2023 and is effective from 30 October 2023. In this alert, we provide a summary of the changes.

Refund of VAT paid by non-profit charitable organizations for charitable purpose

The Executive Regulations have added additional cases allowing non-profit charitable organizations to claim a refund on the VAT paid on goods and services received, which are directly related to charitable activities.

Such a refund would be allowed if the non-profit charitable organization is registered in accordance with the laws in force in Oman. The key question to be considered is whether the refund could be sought for the period prior to the effective date of the amendment.

Refund of excess VAT paid upon import by a non-taxable person 

The amendment allows a non-taxable person to seek a refund of the VAT paid on imports if it exceeds the VAT amount due to the Tax Authority.

To seek a refund of the excessive VAT paid, such a person should submit a VAT refund application along with certain documents, such as an amended customs declaration and evidence of recovery of customs tax (if collected). This could be due to:

• Reduction in the valuation of imported goods.
• Incorrect classification resulting in the excess payment of VAT.

Refund of VAT collected on imported goods if they are re-exported

This amendment permits a person to seek a refund of the VAT paid at the time of goods import, provided such goods are re-exported in accordance with the conditions and controls specified in the Unified Customs Law. 

To seek a refund of such VAT paid on the import of goods, a VAT refund application, along with proof of VAT payment, a statement of re-export, and a refund of customs duty (if collected), should be submitted.

General conditions/controls for the above additional cases of refund

The decision has also provided following conditions/controls which are applicable for the above additional cases of refund:

• Amount of refund is not less than OMR 15.
• OTA to decide on the refund request within 30 days of submission of all prescribed documents. In case approval is not granted within 30 days, the request will be considered to be rejected.
• OTA to refund the amount within 15 days from the date of notification of decision.