Place of Supply of Services under Oman VAT

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Yarab A | Updated on: September 20, 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.

Place of supply of goods Expenses on which Input VAT Deduction is Blocked

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:

Type of Services

 

Place of Supply

 

Transport services of goods, passengers, and any related Services

Place of services will be at the place where transportation begins

Services related to real estate

Place where the property is located

The rental services by means of transport by a taxable supplier to a non-taxable customer

Place where the means of

transport is put at the customer's disposal

Wired and wireless telecommunication Services and electronically supplied Services

Place of actual use or benefit of these services

Place of supply of restaurant and hotel Services, provision of food and beverages, cultural, artistic, sport, educational and recreational services

Place of actual performance

Services related to Goods transported and supplied to a non-taxable Customer

Place of actual performance

Read more on Oman VAT:

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