The adoption of e-invoice in Oman is picking up pace in the region. VAT was introduced in the UAE on 1st January 2018. As per the VAT law, authorities recognizes digital invoicing as a valid model to generate and use invoices or Fatoorah. The VAT in Oman is at 5% which is in line with the GCC framework. Starting 16th April 2021, a VAT rate of 5% will be levied on the supply of goods and services.
Businesses that are registered under VAT, must now issue a tax invoice for the supply of taxable goods and services. The VAT and regulations prescribe the requirements of Tax invoices and It is one of the compliance responsibilities that businesses must adhere to.
What Is VAT?
VAT is an Indirect Tax that is levied on the consumption of most goods and services, though some
supplies are typically exempt from VAT such as certain financial services, certain real estate transactions,
etc. As VAT is a consumption tax, in principle it is ultimately incurred and paid by the end-consumer.
VAT is levied at each stage of the supply chain and (generally) collected by the supplier of the goods and
services on behalf of the Government. Generally, businesses can recover the “input VAT” they
incur on their purchases from suppliers. This input VAT can be claimed against “output VAT” collected
from customers. In the case of a surplus, the difference is remitted to the Government.
The government is going completely paper-free in 2021 an initiative that eliminates over 1 billion paper pieces every year, used for government transactions. The aim is to save time, resources, and the environment through the paperless government. All the internal and customer-facing transactions will be digitised from 2021 to become an entirely paperless government. The government will no longer accept or issue paper documents for all its operations.
Introduction of E-Invoice in Oman
Under Oman VAT, on making a taxable supply of goods and services, a registered business must issue a tax invoice. The taxable person must issue a tax invoice when:
- making a supply of goods or services
- deemed supply
- receiving consideration – in full or part- before the date of supply
- Tax invoices may be issued by third parties on behalf of the taxable person provided the authority’s approval is obtained.
The Regulations will determine the conditions and rules to issue tax invoices, their types, substitutes, amendments, the data it must include, and cases exempt from issuing a tax invoice.
What is E-Invoice in Oman?
E-invoicing is the electronic exchange and receipt of an invoice from one accounting system to another in a prescribed format. The government aims to change digital transparency to tackle the shadow economy, curb tax evasion, and improve compliance. According to research from Deloitte Access Economics, digitising the financial relationship between businesses through an authorised network will result in significant cost savings and economic benefits overall.
Deadline For E-Invoice in Oman
The Oman government has given legal recognition to e-invoices. However, sooner or later, it shall also make e-invoicing mandatory following the lines of the KSA. Experts closely tracking compliance in this region expect the government mandate to be out by March 2022.
Rules For Complying With E-Invoice in Oman
Electronic invoices are required to be in a format that allows readability. There should also be secured online access to e-invoices for downloading as PDF.
E-Invoice in Oman: What is The Way Forward?
It is time to plan and develop an e-invoicing strategy that examines how new protocols will impact financial management processes and software systems. First and foremost, it’s much easier to manage e-invoicing through the cloud than in-house software.
E-Invoice in Oman: Looking for a compliant cloud accounting software?
It is that cloud accounting providers are equipped to handle e-invoicing in a better way. Most providers intend to support e-invoicing over the coming months and in March, If you can’t find any look where else. Systrix’s Travel Accounting Software makes the dull job of creating invoices so simple, you will be able to save time to focus on your core business activities. You can get invoice templates that have fields for HSN or SAC code, TRN number, state of business operation which are mandatory for business owners to stay compliant.