2020 has undoubtedly been an unusual year. The global pandemic has sent many of us into a tizzy trying to find new ways to keep our businesses afloat. And for those of us in Oman, there’s more coming. Yes, calling all small business owners to brace yourselves. The Oman Government passed a Royal Decree on 12th Oct, 2020 approving the implementation of Value Added Tax (VAT) in Oman. This means that going forward all Small and Medium Enterprises (SMEs) must comply with the newly implemented VAT policies.
But worry not, now is the best time to have a plan in place. We’ve put together some steps that’ll make this transition less cumbersome. Let’s tackle this together!
1. Assess your current status
It’s time to take stock of your current accounting and tax status. Are your books in order? The first step to ensure your organisation is ready for VAT is by clearing off all back-logs. Get started with a clean slate. A well-organised accountingpractice will provide you the confidence and clarity required for accurate VAT filing. So, now is a good time to get your books in order.
2. Create a strategy
The next step is to define a strategy that will prepare your organisation for VAT. You can go through a brief summary of the key provisions of the Oman VAT law shared by PWC to help you get started.
As VAT is a transactional tax, it is going to affect almost every aspect of your business – from sourcing to sale, invoicing and taxation. VAT implementation needs to be embedded within all these processes in the system. The only way to do this efficiently is by preparing a strategy that will make this transition seamless. You could also go one step further bycreating a small team to train employeesabout the new VAT policies and compliances.
3. Set up an implementation process
It’s now time to create new business process templates that match the requirements of the new VAT policy. Don’t shy away from reaching out to VAT experts to help you build these templates. At MyAcsys, we work closely with multiple small business owners in Oman and help with everything related to accounting and VAT compliance.
Taking the time to establish a clear process supported by a qualified team of accounting specialists will put you in a strong position from the start.
4. Upgrade your tech
Reach out to your billing/ invoicing customer care teams to update your billing software. Going forward, you’ll need compatible software to prepare VAT compliant invoices and returns. It would also be the right time to evaluate if you should continue with existing vendors or move to vendors who have more updated systems and support in place. Moreover, this will give you another advantage of having access to digital copies at all times.
5. Be aware of processes & penalties
The new law comes into effect from 16th April 2021. That still leaves a good 3 months to get prepared. Businesses that do not register for VAT are liable to strict punishments including heavy fines and even imprisonment. According to the Oman VAT law, tax payers must submit tax returns and all particulars electronically within 30 days of the end of the tax period. We’ve got ample time for a good head start, so plan ahead and reap the rewards in 2021 and the years to come.
About MyAcsys
MyAcsys is an end to end accounting service brought to you by IBFC (Innovative Business Finance Consultants). Established in Oman in 2014, IBFC has been providing top class Financial Consulting services to Small and Medium businesses since inception. From setting up of accounting systems to bookkeeping, financial feasibility studies and Tax Advice, we have played the role of a reliable and friendly partner to several businesses on the growth path.
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