VAT Treatment on Real Estate in Oman

Yarab A | Updated on: July 12, 2022

• Real estate in Oman VAT
• VAT treatment on real estate supplies in Oman
• FAQs on real state supplies in Oman VAT

In Oman, all taxable supplies will attract a standard VAT rate of 5%. This is true for real estate supplies too. Though VAT is applicable, the application of VAT will be tricky given the different classifications of real estate. The Oman VAT law exempts certain types of real estate supplies from VAT, making it even more challenging to apply VAT. As a result, businesses must understand the guidelines issued by tax authorities in Oman and their regulations.

Let’s start with the definition of real estate as per the guidelines issued by tax authorities.

Real estate in Oman VAT

Real estate is generally considered to be any specified area of land, any building, structure or engineering work permanently attached to the land, including any goods affixed to any building, structure or engineering work.

The definition implies that the right from undeveloped land to one with a building attached to land is included. Even car parking and hospitals are included under release estate in Oman VAT. However, certain real-estate supplies like undeveloped land are exempted from VAT.

Given the definition that a building or structure should be permanently attached to the land, anything that is not attached or attached but not of permanent nature is excluded from the scope of VAT. For example, furniture and equipment not permanently attached to the property/building, temporary housing that can be moved without damage and any such similar structure will not attract VAT.

The below table gives you a quick summary of what is included and excluded from VAT in Oman

VAT treatment on real estate supplies in Oman

Below is a summary of the VAT treatment for real estate supplies in Oman.

FAQs on real state supplies in Oman VAT

What is undeveloped land?

It is just a bare land that has no man-made structures or partially completed structures on it, above the surface or in the ground below the surface

When would a land be considered as developed land?

Construction would be considered sufficient to represent a partially completed structure when the stage of the construction has progressed beyond the foundation level. If the construction has not progressed beyond foundation level shall not be sufficient to classify the land as being covered by a partially completed structure

Does a plot of land that has been fenced and walled off to allow construction to begin is considered as developed land?

No. The erection of the fence or wall will not cause the land to be considered developed by structures.

Do the land that have been developed to operate as car parking is considered as developed land?

Yes, the lands developed to operate as car parking on a permanent basis are considered developed lands.

What is the place of supply of real estate and related services?

The place of supply of real estate and related services is where the real estate is located. The place of supply is Oman if the real estate is located in Oman.

By now, you must have guessed how tricky the VAT treatment on real estate supplies can be. If it is not right classified, it could lead to wrong VAT treatment and invite penalties and fines. On the other side, you can easily manage requirements using VAT software. TallyPrime, a business management comes with a complete VAT solution for Oman.

VAT return report in TallyPrime

With TallyPrime, all you need to do is 3-4 simple steps to get started. Using TallyPrime, you can record and generate tax invoices, print bilingual tax invoices, manage all types of supplies, generate accurate VAT returns, and much more.

Read more on Oman VAT:

• Credit Note and Debit Note in Oman VAT
• VAT Fines and Penalties in Oman