All About e-Invoicing in Oman

Sultanate of Oman Tax Authority plans to introduce e-invoicing in Oman in 2023. The authorities plan to roll out the e-invoicing voluntarily in the beginning and make it mandatory at a later stage. The timeline for mandatory e-invoicing is important for businesses operating in Oman from a compliance perspective. 

The tax authority in Oman might follow other GCC countries that have implemented or planning to implement e-invoicing. They can observe the e-invoicing models of the Kingdom of Saudi Arabia (KSA), United Arab Emirates (UAE) and Bahrain.

What is e-invoicing in Oman?

The tax authority in Oman has defined electronic tax invoices in decision No. 456 of 2022, issued for amending the Value Added Tax (VAT) Executive Regulations. It defines an electronic tax invoice as a tax invoice generated in a structured format through electronic means. It has the details specified in the VAT Executive Regulations at the minimum. It shall comply with any other requirements that the tax authority may stipulate.

However, there is no clarity on whether Oman will implement a post-audit or clearance model of e-invoicing. In this model, the tax authorities review and validate the invoice before it is considered a valid VAT invoice.

The authority amended Article 202 of the “VAT Regulations”, stating failure to issue a valid tax invoice attracts penalties ranging from OMR 500 to OMR 5,000. It also notified that the same penalty applies in case of failure to issue an electronic tax invoice.

e-Invoicing in Oman timeline

The Sultanate of Oman Tax Authority stipulated the below implementation timelines:

• April-September 2024: Voluntary roll-out of e-invoicing
• October 2024: Mandatory e-invoicing implementation

Who implements e-invoicing in Oman?

The Sultanate of Oman Tax Authority is responsible for overseeing and implementing e-invoicing in the country.

What is the required format of an e-invoice in Oman?

The format will be electronic and structured, but details on technical specifications are still awaited from the Tax Authority.

e-Invoicing and VAT compliance

Sultanate of Oman Tax Authority introduced VAT in 2021 and implemented VAT registration requirements in phases, beginning with large companies. Many countries across the World are introducing e-invoicing on a mandatory basis. Also, the Sultanate feels that e-invoicing makes VAT fraud and evasion easier to detect. 

Electronic invoices provide transparency in commercial transactions and help the government in better tax compliance. Also, electronic invoices maintain better accuracy and effortless transactions with customers.

VAT-registered taxpayers in Oman shall make necessary changes to their business process and compliance process to align with the e-invoicing initiative once it is implemented. Hence, businesses in Oman shall consider implementing the latest compliance technology for a seamless transition to e-invoicing before the regulations come into effect.

Preparing for e-invoicing in Oman

Businesses in Oman shall observe the implementation of e-invoicing in other GCC countries to anticipate the process changes to be made for a smooth transition to e-invoicing.

Especially businesses shall go through the KSA e-invoicing model to understand the intricacies of e-invoicing and the process flow of e-invoice generation.

It is expected that the Sultanate will soon announce the implementation timelines and the scope of the e-invoicing initiative in Oman.