Suspected tax evaders now subject to onsite raids

TIGHTER GUIDELINES: New regulations by Oman’s Ministry of Finance authorise onsite inspections of company premises, seizure of files, of tax dodgers

Oman’s tax authorities are empowered to conduct inspections of the premises of companies suspected of tax evasion under new regulations issued by the Ministry of Finance earlier this month.

The authorisations, according to a Muscat-based tax expert, are set out in amendments to the Executive Relations (ER) of the Income Tax Law (ITL), issued by the Ministry of Finance vide Ministerial Decision 14/2019 and published in the Official Gazette on February 10, 2019.

“The amendments clearly specify that the tax authorities are not bound to notify the taxpayer of an onsite inspection, in cases of suspicion of tax evasion,” said Gaurav Kapoor (pictured), Tax Director at PWC Oman. “However, such an unannounced inspection shall still be carried out only during business hours and at the premises of the taxpayer,” he noted.

In conversation with the Observer, Kapoor explained that the latest Executive Regulations essentially build on the prerogatives of Oman’s tax authorities in uncovering and investigating suspected tax fraud in the Sultanate.

“Provisions relating to onsite inspection were first introduced by Ministerial Decision 30/2012 and published in the Official Gazette on January 28, 2012 in a move to strengthen tax compliance and ease tax assessment procedures especially for large taxpayers. This was further re-emphasized through Royal Decree 9/2017 (amendments to the ITL),” said the tax consultant.