what is E-invoicing

What is E-invoicing

E-invoicing Introduction

Introduction

 

The Sultanate of Oman is introducing an electronic invoicing system to modernize tax compliance. It uses the 5-Corner Model – an internationally recognized structure for secure, standardized invoice exchange. The system ensures smooth communication between businesses, service providers, and the Oman Tax Authority (OTA).

Project Objectives

  • Strengthen tax compliance and reduce fraud.
  • Enhance transparency in business transactions.
  • Support digital transformation of the Omani economy.
  • Facilitate automation and reduce manual errors in invoicing.
  • Ensure interoperability with international systems.

Targeted Groups

  • Large taxpayers & VAT-registered companies (initial phase).
  • Small & medium enterprises (SMEs) (later phases).
  • Service providers/solution providers (IT companies offering e-invoice solutions).
  • Government entities interacting with businesses.

Implementation Phases & Timeline

 

  • Phase 1: Pilot – Selected large taxpayers.
  • Phase 2: Expansion – More medium & large companies.
  • Phase 3: SMEs Onboarding – Gradual adoption by SMEs.
  • Phase 4: Full Rollout – All VAT-registered entities. (Timelines will be announced by OTA, with progressive adoption in 2025–2026)

How the System Works (Simplified)

  • (Corner 1) Supplier issues an invoice
  • (Corner 2) The invoice goes through the Supplier’s Service Provider .
  • (Corner 3) The invoice is validated and exchanged with the Customer’s Service Provider .
  • (Corner 4) The Customer receives the invoice data.
  • (Corner 5) At the same time, invoice data is sent to the OTA system .
  • Acknowledgments are sent back to confirm delivery.

Benefits

  • For OTA (Government): - Real-time access to transaction data. - Better compliance, fraud detection, and policy-making.
  • For Businesses: - Faster, automated invoicing. - Reduced paperwork and errors. - Easier integration with accounting/ERP systems. - Trusted compliance with tax regulations.
  • For Citizens: - Stronger economy due to fair tax collection. - Better consumer protection with transparent invoicing. - Encouragement of digital innovation.

Obligations

For Companies:
  • Issue invoices electronically using approved formats.
  • Use a certified service provider or compatible ERP solution.
  • Ensure timely reporting of invoices to OTA.
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