Place of Supply of Services under Oman VAT

Yarab A | Updated on: October 26, 2021

The rules for determining the place of supply of services are different from the rules for determining the supply of goods. In the case of goods, broadly, the place of supply is determined depending upon the destination of goods. However, services are intangible and have no fixed manner of delivery, thus determining the place of supply of services is little different from goods.

In this blog, let's discuss in detail how to determine the place of supply of service.

Place of supply of services

Given the different types of services and their delivery, the Oman VAT law has specified different guidelines that need to be applied to determine the place of services.

Default rule to determine the place of supply of services

The default rule for determining the place of supply of services in Oman VAT will be the customer's place of residence.

Example

Top Designers, whose registered place of business is in Muscat, supplies fashion designing services to Khan Fashions, a registered apparel manufacturer in Salalah.

Here, the place of residence of the customer is OMAN, and the place of supply of service will be Oman. Thus, VAT @ 5% will be applicable on the supply.

Place of supply of services when the customer is not registered

Here, services supplied to a customer who is not taxable/registered in any GCC States will be considered to be supplied in Oman, if the taxable supplier has a place of residence in Oman.

Example

Ali Designers, whose registered place of business is in Muscat, supplies fashion designing services to Salala Apparel, Saudi Arabia. Salala Apparel are not registered under VAT.

Here, the place of supply will be Oman since the Salala Apparel is not registered in any GCC states, and the Ali Designers are a taxable supplier in Oman,

In addition to the above, there are certain specific rules to determine the place of supply for certain notified supplies. You can find a ready reckoner of these specific rules below:

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