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.
| 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 |
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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 |
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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:
Oman VAT, VAT Invoice in Oman, Best VAT Software in Oman, Input VAT Deduction in Oman, Exempt Supplies in Oman VAT, How to Calculate VAT in Oman, What is VAT and How does it work, What are the Benefits of Applying VAT in Oman, How is Introduction of VAT going to Affect Oman Economy, What are the Taxable Goods and Services Under VAT in Oman, Place of Supply of Goods under Oman VAT, Value of Supply in Oman VAT
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