Located in the Western Part of the Asian continent, Oman is one of the growing nations among the GCC nations that hold Muscat as its capital.
In addition, the nation shares its borders with Saudi Arabia, Yemen, UAE, and Iran, driving the location to become the central platform for conducting business activities.
Over the years, the company setup process has constantly been driving in the zone, which uplifts the demand for accounting and bookkeeping services.
By the end of this page, you will get a complete knowledge of the essentials of the accounting and bookkeeping services carried out in the zone.
Why Does a Business Need Accounting and Bookkeeping Services?
In the corporate world, accounting is referred to as the language of business. However, the calculation of a business doesn't start after company incorporation. In reality, the cost gets incurred the moment you hold the idea in your mind.
Right from jotting the very first investment amount to clearing off the debits and credits, in-flow and out-flow of money, every transaction is to be recorded, known as bookkeeping.
Well, the process doesn't stop here!
After registering a business in Oman and commencing the business transactions, these transactions are to be analyzed to figure out the insights in the next step. This involves brainstorming, analyzing, and balancing different formats to tally the final balance sheet known as accounting.
Stakeholders and shareholders look at the accounting and bookkeeping records to know the valuation of a business. Therefore, systematic and well-organized accounting and bookkeeping services will enhance the financial performance of the company.
Oman Tax System
The government of Oman introduced the tax system in 2017, with a fixed rate of 17%. However, as the pandemic condition affected globally, there have been tremendous changes in the tax scenario.
His Majesty Sultan Haitham bin Tarek presided a meeting on 9th March 2021, wherein several initiatives have been highlighted to boost the economy effectively, which includes:
- An exemption for the hotel industry has been established for two years.
- Taxpayers have been permitted to make tax payments in instalments for the tax due during 2021
- A tax rebate of 1% has been announced
- Withholding tax on dividends and interest has been suspended
- The tax rate for SMEs has been reduced from 15% to 12%
Here’s a guide on Filing Corporate Tax in Oman that you can look at to understand the core processes.
Accounting Framework in Oman
By the directives from the Central bank, Tax authority and Capital Market Authority of Oman, International Financial Reporting Standards (IFRS) are required to be followed by all organizations in Oman. The requirements of authorities and IFRS are:
- The companies that have issued securities for a public subscription must prepare annual, half-yearly and quarterly financial reports and submit the same to the Capital market Authority of Oman
- Unless other accounting standards are provided by the Omani Minister of Commerce and Industry, accounting and audit firms in Oman are required to follow the international standards in the preparation of financial reports
Who Needs Accounting and Bookkeeping Services?
Irrespective of the business size, it is essential to understand that every business needs to follow the rules to keep track of growth.
A maximum of the small business entities prefers to proceed with bookkeeping instead of accounting as it is cost-effective.
On the other hand, accounting is highly recommended for a mid-sized or an established business as the collected data needs to be analyzed and summarized accordingly.
Activities Performed During Accounting and Bookkeeping
When it comes to bookkeeping purposes, the below-mentioned activities get carried out:
- Manage accounting systems
- Prepare invoice, receipts, payments
- Manage payroll
- Prepare financial statements
- Reconcile of statements
- Calculate the GST
- Prepare business forecast
On the flip side, the accounting activities involves the following tasks:
- Identify the transactions
- Records the transactions in a journal
- Post the transactions in a general ledger
- Adjust the trial balance
- Preparing the financial statements
Benefits of Availing Accounting and Bookkeeping Services
One of the most important financial decisions a business can take is to avail accounting and bookkeeping services in Oman. The significant benefits of availing of these services are:
- It helps a business build goodwill
- It acts as a cost and time saver
- Financial analysis helps a business in better decision-making
- Financial forecasting and budgeting become easier
Business Setup Worldwide- Your Certified Business Partner
Clearing off the documentation turns out to be a complicated task if one is unaware of the proceedings. We at Business Setup understand the pain points that an investor or a newbie's goes through while incorporating a business.
Our dedicated experts are here to provide you with the best corporate services with utmost dedication and to help you clear the proceedings in a hassle-free manner.
Since inception, we have been guiding numerous business minds to set up their business globally, from company incorporation to opening a corporate bank account.
If you want to open a company in Oman, feel free to have a word with our experts at ease.
Contact us today-we'd be glad to assist!