VAT Group Registration Rules

The governments of many countries allow taxable person to register as VAT tax groups. Under this mechanism, more than one company can get a common VAT registration as a VAT tax group under single common control. The VAT returns and VAT payments are carried out by the member who acts as a representative of this VAT group. However, all the members of the group are jointly liable for the payments and returns. The group members can make any transaction or supply within the group and there is no need for VAT accounting for inter-group transations.

Condition to register as VAT Group

Under the Oman VAT Law, two or more persons may register and may be treated subsequently as a Tax Group, provided the following conditions are met;

1. Each person has a place of residence in the Sultanate.
2. All members are legal persons.
3. Each person must be registered for Tax per Law.
4. One person, whether a member of the group or not, has control over all other members of the tax group.
5. None of the persons is a member of another tax group.
6. None of the persons is a person registered with the Authority operating a Special Zone

The Executive Regulations says that if a person who has the right to directly or indirectly control other persons’ activities or commercial matters, or owns more than 50% of the voting rights of the legal person or more than 50% of the capital of the legal person then control exists and such persons can register as group.

Documents Require for Registration:

The persons in the tax group must appoint one of them as a representative of the group. A Registration Application for the tax group must be submitted

1. A copy of the agreement concluded between the group members to appoint a Tax Representative, and an evidence of the representative's approval of the appointment.
2. The Tax Identification Number for each member of the group.

The Authority shall approve the application for Tax Group registration within a period not exceeding thirty (30) days from the date of completing all the details and documents, otherwise the application will be considered rejected.

Implication of VAT after Group Registration: 

The Tax Group Registration results in the following:

1. The representative of the tax group shall be responsible for all tax obligations imposed on the tax group.
2. Any activity that is carried out, any supply that is made, whether taxable or otherwise, and any import of goods or services performed by a member of the tax group, and any supply of goods or services provided to a member of the tax group is considered to have been made by or for the benefit of a Tax Group Representative.
3. The output tax imposed by one of the members of the tax group or the input tax incurred by one of the members of the tax group is considered as if it was imposed or incurred by the tax group.
4. All members of the tax group shall have joint responsibility among themselves for any Tax & penalties.
5. It may not be considered a supply and no Tax is imposed on goods and services transactions between members of the tax group.

Notification for Changes:

The representative of the tax group is required to notify the Authority of any changes that occur to the details previously submitted to the tax group registration application within thirty (30) days from the occurrence of those changes on the form prepared for such like adding or removing members in the group, change in the group representation, any change in the control pattern, cancellation of the group or any other relevant change.

It is necessary that when a member leaves the Tax Group or upon the cancellation of the Tax Group, the person must apply for re-registration in the event that he is still required to register as per the Law.