Friday, March 29, 2024 | Ramadan 18, 1445 H
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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Businesses in Oman prepare for global, regional and local tax developments

This makes it critical for all businesses in Oman to be up to date with their operating models and regularly review how the function is complementing their finance procedures – including the use of technology to streamline processes – to ensure they are thoroughly prepared ahead of any government announcements and can maintain compliance.
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Leading multinational professional services firm EY held the ‘Reshaping the Future of Tax 2023 – Oman’ seminar this week to address key tax topics relevant to businesses operating in the country. The event provided the latest updates on the local, regional, and global tax environment, tax policies, recent tax trends across the MENA region with a focus on the GCC, as well as sustainability.


Ahmed al Esry, EY MENA Tax Leader, said: “The tax landscape in the MENA region is constantly evolving as tax increasingly becomes an important source of revenue for governments as they seek to diversify their sources of income and as an important policy tool to drive changes in the economy. This makes it critical for all businesses in Oman to be up to date with their operating models and regularly review how the function is complementing their finance procedures – including the use of technology to streamline processes – to ensure they are thoroughly prepared ahead of any government announcements and can maintain compliance.” At the seminar, EY global and regional tax leaders discussed how the future of tax is being reshaped and the growing significance of tax in Oman. The recently announced 2023 National Oman Fiscal Budget mentioned 11 per cent of the GDP being accounted as the tax revenue, highlighting the importance of multiple income streams to support the country’s transition to a non-hydrocarbon driven economy.


In addition to key Oman tax practices, attendees went over general recent tax trends across MENA, tax policy evolution, VAT developments, the introduction of the UAE Corporate Tax, transfer pricing developments and the progress of BEPS Pillar 2. The tax seminar saw the participation of over 150 CFOs, tax directors, tax and finance managers, lawyers, and business owners.


Alkesh Joshi, Oman Tax Leader and EY MENA Energy & Sustainability Tax Leader, added: “Businesses in Oman are aware that they need to stay up to date on tax directives but may not realize how quickly the changes will come and the impact they will see on their transactions. In addition, with any new tax regulations comes challenges around the interpretation of various provisions and data transparency. It is critical that organizations have a separate tax team and an ERP system ready to address issues or discrepancies on every transaction. By ensuring that the tax function is agile and compliant, businesses will be able to more efficiently incorporate any amendments to the Corporate Income Tax Law and expansion of the Double Tax Treaty network between GCC countries.” Businesses can also expect to see an emphasis on the use of technology by the Oman Tax Authority (OTA).


The digitalization of tax compliance and controversy will focus on the e-filing of returns on the OTA portal, requests for more information from taxpayers made digitally, paperless assessments by the tax authority, increases data analytics, and shorter assessment timelines.


The Oman tax landscape has seen several amendments to VAT laws over the past 12 months. On October 15, 2022, the VAT Executive Regulations were amended, with 10 amendments to existing articles, and the inclusion of 2 additional clauses to existing articles.


The amendments also involved the VAT exemption of financial services, meaning businesses other than financial institutions are now eligible to exempt their sale of financial services. Furthermore, the OTA has recently requested that all large taxpayers and nonresident taxpayers submit the taxpayer checklist along with the quarterly VAT return.


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