VAT Alert

Value Added Tax 

The following points are the highlights of the VAT Law and are meant to be read together with our previous VAT alerts and the summary on GCC VAT Framework Agreement:

Supply of goods and services

The definition of supply of goods and services is the same as the FA but the Law adds that entering into a contract between two parties entailing the transfer of Goods at a later stage is considered as Supply of Goods. In addition, the Law has stated that:

• The sale or issuance of any voucher, unless the received consideration exceeds its advertised monetary value;
• The transfer of whole or an independent part of a business with the purpose of continuing the business that was transferred are not considered as a supply.

In addition, the Law also add explanation in regard to the composite supply, supply via an agent, and supply by government entities.

VAT Registration

In terms of annual taxable turnover threshold calculation for the mandatory VAT registration, the Law further specifies that it shall be the taxable turnover in the previous 12 months-period and the expected taxable turnover in the next thirty (30) days. This is applicable for companies or people who have their place of residence in the Oman. For those who are not residents of the Oman and obliged to pay the VAT, they need to register for VAT regardless of the number of taxable turnover in the Oman.