Oman Guide: Place of Supply in VAT Oman

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VAT in Oman February 7, 2021

The place of supply is where a transaction is considered to have occurred for VAT Oman. It is determined differently for goods and services.

What is the Place of Supply for Goods in Oman?

The place of supply of Goods in Oman in the following two cases:

If the goods are put at the disposal of the Customer in Oman, concerning a supply without transportation.
If the Goods are in Oman at the start of transportation made by a Supplier or to the account of the Customer, concerning a supply with dispatch or transportation.
The place of supply of intra GCC supply of Goods that are made between Oman and one of the GCC states or vice versa is determined in accordance with the rules of the Regulations.

What is the exception to Place of Supply for Goods in Oman?

The place of supply related to the supply of oil, gas, and water performed through pipelines, and the supply of electricity is determined as follows:

If the supply was from a Taxable Person who has a Place of Residence in any GCC state to a Taxable Trader who has a Place of Residence in Oman or vice versa, the place of supply is the Place of Residence of the Taxable Trader.
If the supply is to a person who is not a Taxable Trader, the place of supply is the actual place of consumption.

What is the Place of Supply for Services in Oman?

The place of supply of Services is in Oman if the taxable Supplier has a Place of Residence in it, provided the Customer is not taxable and not registered in any GCC state. Otherwise, the place of supply of Services shall be at the Customer’s Place of Residence.

What is an exception to Place of Supply for Services?

The place of supply related to the following Services is as follows:

Transport Services of Goods and passengers and related Services shall be at the place where transportation begins.
Real estate services shall be at the place where the property is located.
Rental Services of transport by a taxable Supplier to a non-taxable Customer shall be at the place where the means of transport are put at the Customer’s disposal.
The wired and wireless telecommunication services and electronically supplied Services shall be at the place of actual use or benefit of these Services.
The place of supply of restaurant and hotel Services, provision of food and beverages, cultural, artistic, sport, educational and recreational Services and Services related to Goods transported and supplied to a non-taxable customer, is the place of actual performance.

What is VAT Framework Treaty?

VAT Framework Treaty provides that VAT on the supply of goods or services within the scope of VAT will be charged at a rate of 5% unless the goods or services are exempt or zero-rated. The Member States have been granted the flexibility to choose whether the supply of specific goods or services is considered as zero-rated or exempt.

The distinction between zero-rating and exemption is an important one; in both cases, VAT must not be accounted for on the supply, a supplier making exempt supplies is generally not allowed to recover input VAT concerning such supplies. Recovery of input VAT in Oman incurred concerning zero-rated supplies is generally allowable.

VAT Action Plan for Businesses in Oman

Assess VAT readiness in Oman with VAT and develop a plan to identify the steps necessary to be ready to submit VAT returns.
Understand your transaction to determine all future VAT liabilities and compliance obligations.
Review and update contractual arrangements with vendors and customers to determine each party is aware of its responsibilities for paying and accounting for VAT.
Develop or Purchase software to prepare VAT-compliant invoices and incorporate a process to summaries the VAT collected on invoices.
Educating and Training staff to manage all of the above activities.