Place of Supply of Goods under Oman VAT

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Yarab A | Updated on: October 26, 2021

To define, place of supply is the place where the supply is considered to have taken place. Based on the place of supply concept, businesses need to determine whether the supply is subject to VAT or not. Also, this concept helps businesses to assess tax applicability in case of cross-border transactions, including intra-GCC supplies.   

The Oman VAT law and regulation has specified the rules to determine the place of supply for different nature of supplies. The rules to apply for determining the place of supply are different for supply of goods and services. In this blog, let’s understand the rules for determining the place of supply of goods.

Place of supply of Goods

Based on the different nature or types of goods supplies in practice, the Oman VAT law and regulation specify different rules to determine the place of supply. Let’s discuss each of these scenarios in detail.

Place of supply in case domestic supply of goods with transportation or dispatch

Here, goods are supplied to a recipient located in Oman. It includes the dispatch or transportation of goods by supplier to the customer.

Example

Ali & Co, a registered dealer in Muscat, supplies 100 monitors to Noor Electronics in Muscat. Ali & Co agreed to transport the goods to the premises of Noor Electronics.

Here, since the recipient is in Oman, the place of supply is Oman. Thus, VAT @ 5% should be levied on the supply.

Place of supply in case domestic supply of goods with no transportation or dispatch

This type of supply refers to the ex-factory delivery of goods to the recipient. In other words, all those cases where the customer himself picks the goods from the location of the supplier.

Example.

Abdul & Co, a registered dealer in Muscat, supplies 10 Mobile phones to Max Electronics, located in Kenya. Max electronics self-picks up the mobile phones from the premises of Abdul and Co.

Here, since the delivery is at the ex-factory location of the supplier, the supply place will be considered as Oman. Thus, VAT @ 5% should be levied on the supply.

Place of supply for import of goods

When goods are imported into Oman from a place outside Oman, the place of supply will be Oman. Hence, VAT will be applicable to the supply.

Example: Jehan & Co., a registered dealer in Muscat, purchased 50 mobile phones A-One Pvt Ltd, a firm in India.

Here, Jehan & Co. imports goods into Oman from India. The place of supply will be Oman, and  VAT applies to the supply. Jehan & Co. has to pay VAT @ 5% on a reverse charge basis, either at the port or at the time of filing a VAT return, if the business has opted for a deferred payment scheme. 

Supply of gas, oil, water or electricity (through wires or pipelines)

Supplier

Recipient

Place of supply

A taxable person who has a Place of residence in any GCC state

A taxable trader who has a place of residence in the Sultanate

Place of residence of the taxable trader

A taxable person who has a place of residence in any GCC state

a person who is not a taxable trader

The actual place of consumption

 

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