Oman Archives

Newsletter, Oman, Qatar, Saudi Arabia, U.A.E

An update on GCC Employment and Immigration Law

June 17, 2019

Here are some recent updates about employment and immigration law in various GCC countries.

United Arab Emirates (UAE)

The DIFC Authority has recently suggested a new mandatory DIFC Employer Workplace Savings scheme (“Savings Scheme”) that is designed to substitute the current end-of-service gratuity (“Gratuity”) regime. Coming in effect from 1 January 2020, as per the proposal all DIFC entities would now not accrue Gratuity but would have to contribute to the Savings Scheme that the employer would have to fund on a monthly basis. This Scheme would be based in the DIFC and operated and run by the trustees appointed by the DIFC. Now, all the DIFC employers and employees need to participate in the Savings Scheme only except if an employer works out a qualifying system of their own.

Kingdom of Saudi Arabia (KSA)

KSA’s Consultative Assembly has just approved a new draft law controlling the means, circumstances and terms under which residency visa or permits would be issued for highly-skilled professionals and wealthy foreigners without, the requirement for a sponsor or employer. The specific terms and circumstances under which this residence permit would operate has yet to be announced. Some reports say that all the eligible global nationals would be able to get a residence permit for up to one-year (which would be renewable) or applicable for an unlimited time duration, along with other qualifying conditions such as proof of sufficient financial resources, possessing a clear criminal record and having medical fitness. The qualifying residence permit holders can also sponsor visitor visas for their family and relatives, employment visas for their domestic workers, and they can also own property and travel around without restrictions to and from the KSA, among other advantages.

Oman

The Ministry of Manpower has extended the current six month ban (again for the same period) on expat workers working in the construction and cleaning sectors.

Additionally, the Ministry has further established that the following professions would only be taken by Omanis in the private sector: Administration Director, Assistant General Manager, Human Resources Director, Training Director, Personnel Director, Public Relations Director, Follow-up Director, Assistant Manager, and all administrative and clerical jobs. Those expats who are currently working in any of the aforementioned roles will be allowed to continue in these roles until the end of their existing residency visas; however, they will not be able to renew them.

This change shows that the Ministry is curtailing the historic expatriate dependency by various employers in the private sector and enhance the flow of Omani citizens into the private sector workforce.

Qatar

As per the Qatar work and residency permit procedure, citizens from Pakistan, Sri Lanka, Bangladesh, India, Nepal, Indonesia, Tunisia, and the Philippines (the “Designated Nationals”) were supposed to complete the post-arrival immigration formalities (such as biometrics, medical examination, signing the employment contract and then residence permit issuance) in Qatar. But, as per the recent amendments introduced in Qatar, the Designated Nationals will have to get their medical examination and biometrics done at the Qatar Visa Centers located in their respective nations before the Ministry of Labour in Qatar would issue them a work visa that allows them to enter the country and file for residency permit. As of now, this process is valid for all the Designated Nationals except for those from Nepal, Tunisia, Indonesia and the Philippines who would soon be covered under this new rule.

Qatar is the first GCC country to propose permanent residency status to its foreign nationals, but that is subject to some qualifying conditions. The Ministry is now accepting applications for permanent residency – almost up to 100 every year – as the new regime is now fully in force.

The Qatar government has introduced a new law that relaxes the exit permit requirement that was imposed on foreign employees (under the Qatari federal labour law) as a compulsory pre-condition to leaving the country, be it on a temporary or permanent basis. This new law then came into force on 28 October 2018. As per the head of the ILO’s Project Office in Doha, this law would be abolished for all the categories of foreign citizens by 2019 end. During this interim period, the individuals was have been currently exempted from the remit of the Qatar Labour Law still need to get an exit permit to go out of Qatar (requiring the sponsor’s permission) till the exit permit rule is abolished wholesale. This modification to cover all employee categories is a welcome move and would facilitate a more flexible and fluid workforce.

Conclusion

The speed of amendments in immigration and employment law throughout the GCC has been intensifying and seems to remain as a major growth facilitator as the GCC economies drive forward their agendas for diversification and foresights for the short and longer-term. We are committed to continue monitoring these amendments and updates and keep you posted on any developments

Article, Oman

Oman plans to bring mandatory health insurance into operation

May 21, 2019

Taking a next step from the preliminary announcement about the health insurance for employees’ directive in the year 2018, now a new declaration or resolution has been published emphasizing the scheme that carries out the obligatory employee health coverage in the Sultanate of Oman. According to this, all the private sector employers have to necessarily as per the law provide medical coverage to all their employees.

The Unified Health Insurance Policy (UHIP) should cover the required and obligatory minimum benefits as per the provisions mentioned in Resolution No. 34 of 2019 for ‘The Issue of Unified Healthcare Insurance Policy Form’; which describes the basic advantages and optional advantages in detail. This resolution was published on 24th March 2019 by the Capital Markets Authority (CMA) with immediate effect. There are some specific requirements that have been established with regards to all the healthcare providers and insurers, including:

The Health Insurance Claim Management systems of the Insurance Providers should be compatible and harmonizing with the electronic claims system.
All the medical consultations would be free of charge in case there is a prior referral that has been arranged from a licensed physician.
The healthcare providers should necessarily pursue prior approvals if there are requirements for any inpatient or outpatient treatments involving cost over QR 100 (excluding any emergency situations. In case of emergency situations, the treatment has to be given immediately).
The healthcare providers should first complete the online application form to get an approval; then the insurer should respond within 30 minutes. In case, the insurer doesn’t get back within this time frame, then this would be considered as an automatic approval.
In case of any outside the network claims or reimbursements, the insured party has to make the claim within the time frame of 120 days of treatment.
If in case, the insurer rejects a claim, they should give a written statement of rejection and its reason within 10 days to the insured party.

Other significant information about Unified Health Insurance Policy (UHIP) is as follows:

UHIP is all set to cover almost two million employees in the private sector besides the visitors to Oman, which includes the dependants of the employee.
UHIP will offer minimum health coverage, which includes inpatient and outpatient treatments, costs of medicine, and emergency coverage.
The employers are accountable to cover the cost of insurance while the employee is allowed to upgrade coverage on his or her own expense, if needed.
The expense threshold for inpatient treatments is OMR 3,000.
The expense threshold for outpatient treatments is OMR 500.

All the insurance providers located in the Middle East are equipped to handle the huge inflow of new policies because of the experiences and events with the UAE and Saudi Arabia when a similar directive was instigated. Thus, it is foreseen that this implementation would be streamlined and very much on track. It is imperative to review the basic coverage inclusions that are highlighted in the resolution to find out if the obligatory medical insurance has the coverage you need or not. To review the full Resolution No. 34 of 2019 for ‘The Issue of Unified Healthcare Insurance Policy Form’, you could visit https://www.cma.gov.om/

IMC group offers you with a complete package of company set up solutions. We provide you with all the legal advice and support in terms of setting up and running a business entity in UAE and Oman.

Newsletter, Oman, Saudi Arabia, U.A.E

GCC Immigration and Employment Law Update 2019

April 15, 2019

United Arab Emirates (UAE)

Some major developments in the UAE include:

Various new immigration and employment reforms that were proposed last year would now come into force in 2019. These include the representation of an updated version of the DIFC Employment Law. Effective from 3 February 2019, the new enhanced visa classifications and provisions for the investors, any exceptionally bright students and special talents has come into force and marks a welcome move to the earlier static immigration regime.
The Ministry of Human Resources and Emiratisation has announced a new occupational classification scheme which is applicable to businesses registered in the UAE mainland jurisdiction; this reduces the list of job titles that the employers can opt for while recruiting employees.
Effective from 20 January 2019, any international physicians, dentists and alternative medicine practitioners (termed as the “Healthcare Professionals” collectively) are allowed to work for a maximum of three clinics in the Dubai Healthcare City free zone operating under a special license and visa. As per these new amendments, the Healthcare Professionals are allowed to apply for the licence overseas depending on when they procure a suitable placement in a medical facility in the DHCC; then the DHCC would act as the “sponsor” for these Healthcare Professionals’ visa. The Healthcare Professionals would also be allowed to work for almost two years and sponsor any dependants living with them in the UAE as per this new visa arrangement.
The General Directorate of Residency and Foreigners’ Affairs (the “GDRFA”) in Abu Dhabi now requires the foreign nationals in Abu Dhabi to first get their Emirates ID card made before they get their employment residence permit (the “ERP”) attached in their passport. The applicants who are renewing their ERP in Abu Dhabi will be still able to get their ERP stamp done before they get their Emirates ID card.

Oman

Some major developments in Oman include:

The Ministry of Manpower (the “MoM”) has published a new decree that prohibits the employment of non-Omani residents into particular and designated roles in private higher education and training institutions. The prohibition is currently restricted to the director of admissions and registration department, director of quality assurance, director of student affairs, and also director of the career guidance department. The employment permits that are issued to non-Omani residents for the above-mentioned categories of employees would be applicable until expiry. Post that, no renewal permit would be granted.
Enhanced Omanisation initiatives are probable to continue throughout this year. The six-month ban that applied to the 87 sector-specific professions (including, but not limited to, administration and human resources, accounting and finance, media, IT and engineering) and enforced in January 2018, which was extended in July 2018, is likely to be extended by another six months.
In February, the National Centre for Employment has opened only to Omani residents and serves them as a one-stop hub for job-seekers, while also unifying employment efforts, thus acting as a means of regulating the demand and supply of employment opportunities.
Effective from January this year, the Royal Oman Police have also relaxed some of the residency rules, especially for the children and siblings of global investors in the nation. The goal of this initiative is to enhance the inflow of foreign investments and offer social stability to the investors. According to a general immigration rule in Oman, children and siblings of expats who are aged 21 years or more and 18 years or more have to leave the country unless they obtain an employment visa to carry on residing in Oman beyond the fixed age limit; however, there is an exception in special cases under some humanitarian grounds in case the Director-General might waive this age requirement. But, under the new initiative, expat children or siblings of global investors coming into Oman would be exempted from this particular age requirement, that is, a global investor will now be able to get his children or siblings along, irrespective of their age, bringing them under his sponsorship and responsibility. This new relaxed residency program would be applicable to global investors only if they go on investing or having an investment in Oman.

Kingdom of Saudi Arabia (“KSA”)

Some major developments in the KSA include:

In the year 2017, the Ministry of Labour and Social Development (“MLSD”) had cut down the validity of the Block Visas from two to one year. There was an exemption for domestic workers and any foreign staff at government agencies. The MLSD has again launched an initiative in January 2019 for extending the new Block Visa’s validity from one to two years and without any extra government fee. As per this new initiative by the MLSD, businesses in KSA will be allowed to cancel their current Block Visas permitting them to hire global workforce and issue new extended visas applicable for two years depending if the visa requirements are being met. This extension of Block Visa’s validity in the KSA would facilitate all the private sector businesses in terms of time and effort, cost and other administrative work.
The MLSD has also implemented a new and instant calculation for Saudi and global employees as part of its existing Nitaqat System, which is effective from 2 February 2019.

Conclusion

Amendments to the immigration and the employment laws in the GCC countries are expected to continue in short and long-term. We would be monitoring these changes and will keep you updated with any developments.

Article, Oman

10 Reasons of Setting up a Business in Oman in 2019

March 12, 2019

Oman’s current Sultan is making remarkable efforts to modernize the country and make it more open. Though oil and gas remain as the most prominent sector, Oman’s economy is definitely diversifying to a large extent taking into account various industries to protect the economic composition of the nation. Oman now ranks as one of the most developed countries of Arab, which attracts a lot of global investors. It is forecasted that its GDP growth would go up to 3.5% this year. If you are planning to start your business or register a foreign company in Oman it is an ideal time to do so. You can set up different entities in Oman, be it an LLC company or a Sole Proprietorship. But before establishing your business in Oman, you must know about its economy and the benefits you would derive.

Opportunities of Business in Oman

The following are some of the most lucrative enterprise opportunities available in Oman:

Travel and Tourism
Fuel Station
Haulage
Perfume
Electronics/Other Home Appliances
Facility Maintenance
Restaurants
Daily Commodities Store

Advantages of Setting up a Business Entity in Oman in 2019

Oman has been successfully attracting many international investors. Usually, investors take into account various parameters and then move towards foreign company registration in Oman. Some of the advantages that an investor would get on starting their business in Oman are as follows:

1. Oman’s Economy

The economic condition of any nation can be gauged by its economic freedom index. Oman’s economic freedom score was at 61.0, which took its economy to the rank of 93^rd freest economy as per the 2018 Index. It was also ranked as number 8 among the 14 nations in the MENA region.

2. Strategic Location

Being at a distance of less than 2 hours from any key business centers of Europe, Asia, and North America, Oman prime location is a very big advantage. Because of its strategic location, the non-oil exports are reaching to almost 176 countries. Oman has now become the gateway to the Arabian Gulf and is a meeting place of the African and Asian continents, thus, opening the path for an array of business opportunities.

3. Global Appeal

Oman’s several trade agreements enable the country in carrying out free trades with multiple nations. A few of them are GAFTA, GCC, and FTAs with Iceland, US and Singapore, Norway and Switzerland.

4. Secure Environment

Investor-friendly and safe environment with no restrictions on resource and profit repatriation adds to the benefits. Other than that, only 15% of corporate tax (flat rate) is charged.

5. Talent Pool

Out of 4.3 million of its population, about 1.7 million are working, thus ample manpower is available.

6. Infrastructure

Best-in-class infrastructure possessing internationally-ranked ports, roads and airports are a big plus point too. There has been a huge investment in railways to enhance the network so as to strengthen Oman’s transportation sector.

7. Natural Resources

It’s a fact that oil export has boosted Oman’s economy and the natural resources in the country are quite favorable for any business setup. But now the government is trying to diversify by also investing in private sector and international businesses and not depend completely on oil.

8. Pro-Business Steps by Government

Favorable government policies like offering incentives to support domestic and foreign enterprises with tax exemptions, free trade zones, interest-free loans etc, Oman has attracted many global investors.

9. Trade-Friendly Association with Neighboring Nations

The culture here fosters building strong bonds and collaborations in both social and business contexts. Oman is known to have built business-friendly relations with all its neighboring countries.

10. Exemptions

Several exemptions are given to entrepreneurs who want to set up their enterprise in Oman; for example, they are exempt from corporate income tax on initial OMR 30,000 and total exemption up to 50 years in case it’s a free zone registered company. There is an exemption also from customs duties if importing equipment or raw material for any production.

So if you are planning to start a new business in Oman, or in need of services for accounting services in Oman, do contact us and our business experts would be able to assist you with the process of establishing and running your business in Oman.

Article, Bahrain, Oman, Qatar, U.A.E

Tax Structure in the GCC

February 26, 2019

The Gulf Co-operation Council (‘GCC’) region is undoubtedly a very attractive jurisdiction for global investments mainly because of its favorable tax regimes. As per GCC’s diversification strategy and to decrease reliance on revenue from hydrocarbons, GCC nations have devoted to launch new indirect taxes and some other taxation reforms. But the developing GCC tax regimes throw up a challenge to all the foreign investors wanting to set up their presence in the GCC, or acquire a business, sell, or divest in the GCC.

In this article, we are going to give you an overview of the key taxes in the GCC.

Taxes in the GCC Region – An Overview

Corporate Tax

Corporate tax is a direct tax that is levied on a company’s taxable profits. People not residing in the GCC nation could be subject to corporate income tax or may be withholding tax as per the local rules in the particular GCC country. The non-residents doing business in a GCC country having a permanent setup are subjected to corporate income tax; however, non-residents earning taxable income in that GCC country could be subject to the withholding tax.

Some GCC countries like the UAE and Bahrain enforce only corporate tax on businesses operating in the oil and gas field and foreign bank branches. In the KSA, Kuwait, and Qatar, corporate tax is applicable on the profit share that is attributable to the non-GCC shareholders of the domestic entity.

Withholding Tax

Withholding tax is that tax, which is deducted at source on the specific payments done by a resident in the GCC nation to someone outside of that nation. Varying rates are applicable depending on what kind of payments is made. Bahrain and UAE do not impose this tax, but other GCC nations impose withholding taxes if a resident pays interest or dividends and royalties to a non-resident.

Zakat

Zakat is a type of Islamic tax that has been only enforced in some GCC nations like the KSA and Kuwait as of now. In the KSA, Zakat is mandatory on the shareholders of local companies who could be Saudi or GCC nationals. This tax is to be paid by the local company and is applicable at the rate of 2.5% dependant on the higher of the adjusted net profits or the Zakat base that is attributable to the shareholders who could be Saudi or GCC citizens.

VAT

A type of consumption tax that is imposed on goods and services supply and is charged typically on the value which gets added on each stage of the supply chain. The GCC countries implement this tax at a 5% standard rate. Every GCC nation can enact their own VAT legislation which will be based on some common principles. Till date, KSA and the UAE have implemented VAT on 1 January 2018. Then, Bahrain went on to implement VAT on 1 January 2019. While doing transaction planning, companies should evaluate the VAT effect of the asset transfer carefully and check if such VAT treatment is applicable on the transaction.

Excise Tax

Known as the ‘sin tax’, excise tax is a type of indirect tax that is levied on particular goods that could be detrimental to health or environment. Till date, the KSA, the UAE, Qatar and Bahrain have implemented this tax on tobacco products at 100%, carbonated drinks at 50%, and energy drinks at 100%.

Customs Duty

The GCC nations follow a unified customs duty regime and this duty is imposed basically at the first point when the goods are entering in the GCC. Imported goods are subjected to customs duty at the rate of 5% of the total cost, freight (‘CIF’) invoice value and insurance. But, some goods could be subject to customs duty at a much higher rate, while some other goods, are totally exempt.

Transfer Taxes and Stamp Duty on Real Estate

Stamp duty is imposed in Oman and Bahrain on transferring or registering real estate. In the UAE, there is a registration fee when someone transfers ownership of land or shares in the companies holding real estate.

To conclude, the GCC countries have maintained minimal or zero taxes as it attracts investments in the region. However, announcing new taxes like VAT, the variance between local tax legislation and double tax treaties and the approach of tax authorities make it complex for global investors. But if you are a foreign investor who has business interests in this region, you should keep abreast of all the GCC tax developments and re-examine your management strategies of tax risk in the region.

Newsletter, Oman

Oman’s Al Mazunah Free Zone is Attracting New Investments

January 17, 2019

New doors are opening for more and more investments for the Al Mazunah Free Zone in Oman, which comes under the purview of the Public Establishment for Industrial Estates – Madayn, as various operating projects reached a number of 197 by the end of November 2018, stated Said bin Abdullah Al Balushi, who is the supervisor of business processes in this free zone.

Al Balushi said that Al Mazunah Free Zone has been fortunate to get 46 fresh investment applications with professionals wanting to do company formation in Al Mazunah Free Zone, which are now under the process of review. This free zone has been very instrumental in the establishment of many Small and also Medium Enterprises for the residents in the wilayat of Al Mazyunah. Approximately 14 SMEs were set up in the areas of import and export, shipping and unloading, hospitality, construction, and also in public services. What’s more? The free zone also provided 60 new job opportunities especially for the national cadres in the operating body of this free zone, some investing companies and the developer named Golden Hala Company.

Al Balushi also shared that Madayn is working on various projects as of now, which include developing the free zone in phase one (second package), and in phase two, the aim would be transmitting electricity to the various leased companies such as cables and transformers, and the broadband project.

According to the electronic system taken up by Al Mazunah Free Zone for managing the transfer of exported and imported products, the volume of imported products into the free zone has reached 155,666 tonnes by November 2018. In addition, the total number of imported vehicles, equipment, and machinery added to about 7,739 during this period.

Al Balushi also said that Madayn keeps making continuous efforts for promoting the Al Mazunah Free Zone among various investors by organizing events that focus on the new investment opportunities available in the free zone and how its strategic location contributes to the local and global trade and investment movement.

These efforts have been planned as per Madayn’s vision to further improve Oman’s status as a top regional hub of manufacturing, ICT, entrepreneurship excellence, innovation and its goal to bring in more industrial investments and keep on giving continued support by making locally and internationally competitive strategies, providing stable infrastructure and value-adding services, and simple governmental processes. These efforts also are in line with the Madayn’s key objectives such as luring fresh foreign investments into the Sultanate and localizing the national capital, while continuing to encourage the private sector to attain sustainable financial and social development, accomplishing environmental sustainability, and also contributing to adding new job opportunities for the national cadres.

Al Mazunah Free Zone was set up under Royal Decree no. 103/2005 to function under the administration of the Public Establishment for Industrial Estates. Its strategic location, which is on the border of the Sultanate and Yemen makes it the perfect Gulf gateway for transit trade especially to Yemen and Eastern parts of Africa. The free zone has a goal to bring in more domestic and international investments for enhancing the trade exchange, get more advanced technologies, and open for new job opportunities. Various incentives are given to investors, which include customs’ exemptions, full or 100 percent foreign ownership, no capital requirements at all, and the Omanisation rate at 10 percent.

So if you are planning of company formation in Oman in near future, get in touch with us at IMC and we will be happy to assist you.

Newsletter, Oman

Oman issues a new regulation regarding Electronic Transactions

June 21, 2018

As technology and internet are becoming imperative in running operations of an organization, or managing online and electronic transactions domestically and internationally, having a strong legal framework to protect the interests of stakeholders is very important.

Recently, the government of Oman has issued the Sultani Decree 69/2008, also known as “the Electronic Transactions Law” (“the Law”). This legislation has been passed because of ever-increasing electronic and online transactions, which also give rise to the many cases in Omani courts. Earlier there were not enough laws to take care of such issues.

Electronic Transactions Law

This Law is pursuant to Article 3 and applies to any electronic or online transactions, signatures or records, and also to electronic messages. But it does not apply to matters pertaining to personal status law, like marriage, wills and divorce. It is also not applicable to many court procedures, proclamations, judicial summons, arrest orders etc. Usually, the Law provisions apply to all the transactions between any persons who are transacting by any electronic mode and their consent may be inferred from their conduct. Any agreement to do any transaction electronically would not be obligatory on any of the parties to carry on other transactions by the same mode.

Electronic communications like messages would also have the same effect legally if all the guidelines under this Law and its implementation rules are strictly observed.

But there may be cases, where there is a particular requirement under any other legislation, for example, the Commerce and Employment Law requires the party in question to safeguard any information or document relating to a specific transaction or an employee. However, this requirement holds true if the following conditions are met:

The information, record, document or data are saved in their original form, electronically and should be able to prove that they are in its original form;
The information, record, document or data would have to be retained in a manner that render it retrievable and usable for any future reference; and
The information, record, document or data would be retained in a manner that helps to identify their beginning point and destination, and also the exact time and date when they were sent or received.

If any message is presented in a court for a legal proceeding, it will only have evidential weight depending on the following factors:

The trustworthiness in which the message was entered, performed, processed, stored or presented;
The steadfastness with which the information’s integrity was maintained;
The dependability of the source of information;
The reliability of how the originator of the information was identified; and
Any other pertinent factor.

Though this Law takes care of the services concerning the service providers into authentication in terms of certificates issuance into electronic authentication or any other services dealing with electronic signatures, the reality is that the number of authentication services providers who are licensed by the IT authority in Oman. The Law also covers the protection of any personal data that should not be shared or used for anything except the original purpose for which it was obtained.

In order to deal with the IT-related crimes, the Oman government has issued Sultani Decree 12/2011(“Combating of Information Technology Crimes Law”). This law criminalizes some specific acts that deal with the breach of safety and privacy of electronic information and also information systems, and also the misuses of IT means.

The government of Oman has put in place the basic legislations including the Law and the Combating of Information Technology Crimes Law, which controls the formation and functioning of electronic transactions and contracts. The Oman government has also created bodies such as ITA to ensure proper implementation of the Law provisions and their use and application by governmental agencies such as Ministry of Commerce and Industry and Royal Oman Police. This enactment has no doubt strengthened the use of IT in Oman and it also ensures extra protection to the users. However, recovering for any returns of goods or damages also pose a challenge that is needed to be regulated. There is a requirement to lay clear terms and conditions in case the law is executed in different territories.

All the individual users, companies and also governmental entities will have to develop a strong internal regulation system, which lays the criteria and regulations for their employees while doing any electronic transactions or starting verification process of the second contracting party, so that the protection of data and information processing and its proper applicability is guaranteed.

Newsletter, Oman

Checklist for Oman VAT implementation

January 17, 2018

The GCC council has set the stage for VAT implementation from the start of this year or in the first quarter of 2018, and the member states of the United Arab Emirates and Saudi Arabia have issued a formal announcement and implemented VAT law in their respective provinces.VAT in GCC comes with a certain flexibility,and the member states can take advantage of this flexibility to draft VAT law according to their local business and regulatory regime.

Oman is yet to implement VAT, and businesses should seek guidance to avoid penalties and issues of non-compliance. They should have adequate knowledge to tackle the potential scenarios of VAT in Oman like the updating of accounting and IT systems and revision of contracts. As the VAT liabilities are self-assessed, it often leads to severe penalties or interference in daily business activities.

Along with the other member states, Oman is planning to levy a 5% VAT which is also an indirect tax levied in every stage of economic activity in the supply chain, and this move is a game changer in the area of the indirect tax levy.

Here are some of the ways through which a business can prepare for the forthcoming announcement of VAT in Oman:

Calculate the impact of VAT In GCC and VAT in Oman if the business has an extensive presence in GCC or just in the state of Oman.
Assess whether the business comes within the mandatory threshold, if yes what are the provisions and steps to be taken for the VAT compliance,
Develop a resourcing plan to estimate the necessary work and updating of the systems to accommodate the requirement of the VAT.
Review and revising the internal framework of the business, and internal VAT compliance teams for monitoring and devising reporting mechanisms,
Review and update the existing contracts to include the VAT requirements and ensure all the involved parties are aware of the responsibilities of reporting and accounting of VAT provisions.
Including the necessary contractual revisions in the existing contracts and appraising the vendor of the changes required in managing VAT costs in vendor contracts or future pricing rate in customer contracts.
Training employees on VAT compliance and the updating practices of IT and governance,
Review and implementing the necessary changes in the business framework and models,
Review and updating of the existing and future contractual arrangements with a view of accommodating the VAT law in the with an effect that might impact on the corollary obligations.

These are the changes that business to absorb the provision of VAT in Oman and maintain its position in the market post VAT in GCC.

For more information on VAT implementation in Oman, reach our consultant at [email protected] or log on to www.intuitconsultancy.com

Newsletter, Oman

The BEPS inclusive framework gets a new member – Oman

December 11, 2017

Oman is the second country of the Gulf Cooperation Council (GCC) to join the BEPS framework of the OECD. The BEPS framework is the acronym of Base Erosion and Profit Shifting initiative. This initiative is on the lookout for curbing painful taxation procedures.

The Sultanate of Oman is the 104^th country to join this prestigious council. The BEPS framework aims to curb the taxation and present the following steps:

Measures against harmful tax practices (Action 5)
Model provisions against treaty abuse (Action 6)
Transfer Pricing documentation and Country-by-Country Reporting (“CBCR”) (Action 13)
Enhancing dispute resolution through Mutual Agreement Procedure (“MAP”) (Action 14),

This step will lead to the alteration of the Oman tax law, and Oman has to revise its tax framework to include these four steps. Oman also has to provide inputs and recommendations to BEPS council and pay an annual fee. The joining of Oman in the BEPS is predicted to bring some changes in the Oman tax law system.

Experts are expecting changes in the following areas:

The Omani authorities will increase their focus on the benefits before signing any treaty or providing any benefit for the citizens or tax exemption for the foreign entities.
At present, Oman tax law has provisions in Transfer Pricing, but the Omani authorities are lax on the filing of on any credentials. The rules allude to the point that the trades should be at Arm’s Length price. Nevertheless, the Omani tax authorities are partial to the fact that the Taxpayer has to provide detailed TP documentation during the assessment proceedings. With the more significant emphasis on TP as part of the BEPS measures, and CBCR (Country by Country) as one of the necessary standards, it is likely that requirement of correct credentials may be introduced in Oman tax laws.
Oman should work closely with other affiliate countries to monitor the execution of BEPS. This action will enable the taxpayers to have access to adequate and practical dispute resolution mechanisms under bilateral tax treaties.
More comprehensive disclosures to ensure clearness.
Supplementary compliance requirements.

In due course of time, Oman might also issue judicial modifications emphasizing the timelines about submissions, the extent of legal changes and the hands-on need to, prioritize the BEPS measures and implement these measures before the official announcement.Therefore, it is a prudential move for the entities in Oman to start preparing for the impact that might arise from the effect of BEPS instead of waiting for the formal announcement.

For more information reach our consultant at [email protected]

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Opportunities of Business in Oman

Advantages of Setting up a Business Entity in Oman in 2019

1. Oman’s Economy

2. Strategic Location

3. Global Appeal

4. Secure Environment

5. Talent Pool

6. Infrastructure

7. Natural Resources

8. Pro-Business Steps by Government

9. Trade-Friendly Association with Neighboring Nations

10. Exemptions

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