Late VAT registration risk

The situation

Failure to register in time is an offence, and the assessment window extends to 10 years when registration was late.

The law

• VAT Law, Royal Decree 121/2020 (penalties): Late return fine OMR 500 to 5,000; late payment 1 percent per month; wrong declaration 1 to 25 percent of the difference; evasion 300 percent
• VAT Law, Royal Decree 121/2020 (records and time limits): Keep records 10 years (15 for real estate); assessment within 5 years, 10 if registration was late

What it means for you

Register now and work out VAT on sales since you should have registered. The Tax Authority may assess that period with penalties and 1 percent monthly late payment charges. Coming forward early usually costs less than being found.

What to do

1. Register on TMS now.
2. Compute VAT since the liability date.
3. Discuss settlement with the Tax Authority.
4. Fix pricing and invoices.

Related

• Mandatory VAT threshold
• Non-resident sellers and VAT
• Group of companies and registration
• Displaying the VAT certificate
• Documents for VAT registration
• Exempt supplies and registration