TaxSavvyOM

Under declaring income in the return

We found an error that understated our taxable income. What is the risk?

The situation

Under declaration can lead to a fine of 1 to 25 percent of the difference between the correct tax and the tax declared.

The law

  • Income Tax Law (penalties): Late return fine OMR 100 to 2,000; late payment 1 percent per month; under declaration fine 1 to 25 percent of the difference
  • Income Tax Law (assessment time limits): Assessment generally within three years from the end of the year the return is filed; five years if no return

What it means for you

If tax was understated by OMR 10,000, the fine could be OMR 100 to 2,500. Correcting before the Tax Authority finds it shows good faith. The Tax Authority can assess within three years from the end of the year the return was filed.

What to do

  1. Quantify the error.
  2. Ask the Tax Authority how to correct the return.
  3. Pay the extra tax.
  4. Document the cause.

We can do this for youAnnual corporate income tax return with audited accounts (15 percent): OMR 650

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