A business entity is given a physical form with one of the primary motives being that of earning a profit, generally. Numerous transactions get initiated from the very first day which reflects cash inflow/outflow, variable/fixed expenses required to enter the operations, list of creditors/debtors etc. These transactions are to be recorded accordingly so as to give a clear picture regarding the financial firmness of the entity. Just like other countries, Oman also has got set standards and rules for its accounting front. This article holds the necessary information regarding accounting and bookkeeping services in Oman that every businessman who plans to incorporate a business in Oman must be aware of.
Accounting and Bookkeeping Services in Oman
Although both the terms look similar, there exists a difference between the two. Bookkeeping holds the records of individual transactions, whereas accounting ends up analyzing and classifying these transactions. In Oman, the overall accounting framework is looked by the Omani Government body OACPA. Let’s have an overview.
The Association of Chartered Accountants of Oman, also known as OACPA for short, was established on 22nd May 2016. The organisation was brought into existence with an aim to fulfil the following vision:
- To be a bond with the organisation to supervise the profession
- To provide consultancy and studies related to the accounting profession
- Uplift the level of accounting by providing information and scientific research in the field of accounting
The process of setting up a business in Oman doesn’t come to an end with the incorporation process. Registration with the tax authorities is a must, and failure to do so will result in a penalty to be borne by the entity. In Oman, a flat rate of corporate tax is subject to 15%. In the year 2017, a new category named micro-business has been initiated who are liable to pay corporate tax at a rate of 3%, which is to be registered at the Ministry of Finance in Oman. The nation has also introduced withholding taxes on dividend payments, interest payments, payments for technical services. The country is set free from VAT and Sales Tax.
Income Exempted from Tax
- Dividends received by an establishment
- Profits or gains from disposal of the securities listed in the Muscat Securities Market
- Income earned by practising maritime transport activity
- Income derived by a foreign person from the exercise of maritime or airport transport activity subject to reciprocity
- Revenue generated through investment funds
- Industrial projects
- Exemptions in other fields will be validated only if the Minister of Financial Affairs issues a decision
Oman Double Taxation Agreements (DTA)
A Double Taxation Agreement (DTA) is an agreement that takes place between two nations to avoid double tax rates levied on both sides. Oman holds Double Taxation Agreements (DTA) with 28 countries which also include China, Canada, India, Netherlands, Singapore, and the UK.
Benefits of Availing Accounting and Bookkeeping Services
- Reflects inflow and outflow of cash
- Holds up-to-date recordings to minimise financial issues and crisis
- Transparent picture of business expenses gets displayed
- Decision-making process regarding company purchases, expansion becomes easy
- Business malpractices can be easily tracked
- Financial stability of the company receives highlighted
- The Budget can be easily created and controlled
By now you must have got a clear idea as to why the accounting and bookkeeping services are essential. If you are planning to set up your business in Oman, you can’t ignore this domain. Maintaining the accounting books is a complex process but opting for a consultant or audit firm in Oman can ease the process. We at Xcellence are here to help you in preparing your book of accounts. We understand the integrity and essential role that accounting and bookkeeping play while establishing a business. We come with a broad portfolio of accounting services that include:
- Bookkeeping and financial accounting
- Payroll and personnel administration
- Audit reports, cash-flow forecasting and bank reconciliation
- Corporate secretarial services
- Company performance reviews
- Compilation of financial statements
- Preparation of international tax structure
To avail these services, do contact us. We’d be happy to assist you.