GCC Tax Theatre | Oman Indirect Tax | Episode 08.3 | 19 March 2021 | Oman VAT Executive Regulations - Unofficial Translation (Part 3)

Title 3

Due tax

Chapter 1

Place of Supply of Goods

Article (20)

Transport - in applying the provisions of Article (21) of the Law and this Chapter - means the movement of Goods transported by the supplier or any third party, and it does not include cases in which the customer transfers the goods for himself.

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Article (21)

The Sultanate shall be deemed as the place of Supply for intra-GCC Supplies of Goods with transport or dispatch, which take place between the Sultanate and one of the countries in the Council applying Tax or vice versa, in the following cases:

1- If it is the place from which the transfer or dispatch begins, and the customer in the country to which the Goods are transported or dispatched is not registered for Tax purposes in that country, or is not obligated to register there.

2- If it is the place where the transfer or transmission ends, and the customer is registered for Tax here or the supplier is registered in the Sultanate or obligated to register in it.

Article (22)

The Tax is due on intra-GCC supplies at the ports of entry of the Sultanate, in the event that no proof is provided that the Tax has been paid in the Council on the Goods supplied to a Person who is not subject to Tax in the Sultanate, and this Due Tax is collected by the Directorate General of Customs.

Article (23)

The Sultanate shall be considered as the place of Supply for intra-GCC Supplies of Goods with transport or dispatch without installation or assembly, which take place between the Sultanate and one of the countries in the Council applying Tax or vice versa, in the following cases:

1- If the location of the Goods, on the date of commencement of the dispatch or transportation, was in the Sultanate.

2- If the customer in the country, to which the Goods are transported or sent, is not registered for Tax purposes in that country.

3- If the supplier is registered in the Sultanate, provided that the total value of the supplier’s supplies in the other country during any twelve (12) month period does not exceed the mandatory registration threshold.

Article (24)

The Taxable Person must, in order to prove the transfer or dispatch of Goods from the Sultanate to any State in the Council, or vice versa, notify the Authority of the following documents:

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. Commercial documents showing the customer's name, tax identification number and address, and any invoices related to the supply.

2. Transport documents confirming the transport or receipt of the goods, the date of transport and the receipt -

3. Customs declarations and documents -

4. Any data or other documents specified by the device.

In the event that the aforementioned data and documents are not submitted, they are considered immovable goods, and the place of supply is determined accordingly.

Chapter 2

Place of supply of services

Article 25

The place of supply of services for transporting passenger goods and services related thereto - in the application of the provisions of Clause (1) of Article (24) of the Law - shall be determined according to the following:

 1- Supply of goods or passengers transportation service: at the place of commencement of the transport process, even if the transport process results in stopping at more than one point.

2 - The supply of transport-related services: at the place of supply of the associated transport service. The services related to transportation mean any service necessary to complete the process of transporting goods or passengers, and it includes - in particular - the following services:

a. Port fees, including fees for access to the berth, mooring, berthing and parking -

B- Customs tax and customs clearance fees related to transport-

C- Air Navigation Services

D- Extension services

E- Supply of crew members

F- Charging, discharging or recharging

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G- Stocking the goods

H- Opening for inspection

I- Mobile security services

J- Preparing or amending documents, shipping certificates, and air or sea freight bills.

K- Packaging and wrapping necessary for transportation -

L- Storage services-

Article (26)

What is meant by services related to real estate - in the application of the provisions of Clause (2) of Article (24) of the Law - means any service on the area of the property or related to a specific area of the property, and includes - in particular - the following:

1- Engineering, studies, management and supervision works for construction implementation

2- Accommodation services

3. Granting, assigning, or inheriting any right to the property

4- Granting the right to claim any right in the real estate or assignment to the right to claim or inheritance

5- Granting the right to obtain a grant to obtain any right in the real estate or assignment that the right to obtain this grant or bequest-

6- Granting a license to occupy a property or assigning or leaving the license.

7 - Granting any contractual right that can be exercised on the property, or assignment or abandonment of the contractual right.

8- Building and demolition services and construction implementation services.

9 - Building trade, management, maintenance and repair, real estate agents and brokers, real estate experts and others who carry out tasks and - works related to real estate.

Real estate means any specific area of land or any building, building structure, or engineering work permanently linked to the land, including any goods attached to any building, building structure, or engineering work.

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Article (27)

Telecommunication services - in the application of the provision of Clause (4) of Article (24) of the Law - means services by which the transmission, transmission, transmission, or reception of signs, symbols, signs, writing, visual and invisible images, sounds, data, or information are carried out. Whatever their nature, which is carried out by wire, radio or optical systems or any other electromagnetic or electronic system, and includes - in particular - the following services:

1- Landline and mobile phone services for transmitting and exchanging voice, data and video, including telephone services with a photographic component (video calling services.

2- Telephone services provided over the Internet, including Voice over the Internet (VoIP)

3- Voicemail, call waiting, call forwarding, caller identification, triple dialing, and other call management services.

4- Calling services.

5- Voice text services.

6- Fax, telegraph and telex.

7- Internet access, including the World Wide Web.

8 - Communications private network that provides communication links for the exclusive use of the customer.

9 - Radio and TV broadcasting services.

10 - Transferring or waiving the right to use capacity for the purposes of broadcasting, transmitting or receiving communications.

Article (28)

The place of supply of telecommunications services is located in the place of actual use or utilization of these services. The place of actual use of the services or their utilization is determined as follows:

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1- At the customer’s place of residence, in case the customer is subject to tax. Unless the supply of services is through fixed communication tools located in the specified geographical location to receive the service, such as fixed or public telephones or Internet services that require the actual presence of the customer at the site of using those tools, then the place of actual use of these services or their use is in the location of those tools In the specified geographical location.

2- In the place of actual use of these services or benefiting from them, in the event that the customer is not subject to tax, and that place shall be determined according to the following:

A - If the supply of services is through fixed communication tools located in the geographical location specified for receiving the service, such as fixed or public telephones or World Wide Web services that require the actual presence of the customer at the site of using those tools, then the actual use of the service or its use by the customer shall be in The location of those tools in the specified geographical location.

B - If the services are provided through mobile networks, the place of use and use of the service shall be in the country in which the mobile phone network used to receive these services, including international roaming, is located. The actual use or utilization of the services must be determined for each transaction separately, in the event that a supplier supplies telecommunications services to a customer with the aim of re-supplying them to another customer. In all cases, the place of actual use of telecommunications services or their use shall be determined according to the tax due date stipulated in Article (26) of the law.

Subsequent use of the service received in determining the place of supply.

Article (29)

The services provided electronically - in the application of the provision of Clause (4) of Article (24) of the Law - mean the services that are provided directly via the Internet or an electronic network, and the provision of these services is automatic without human intervention, and can only be provided using information technology and includes In particular, the following services:

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1- Providing digital products, including software, and changing or updating them.

2- Providing or supporting a commercial or personal presence on an electronic network such as a website or webpage.

3- Services that are created automatically from a computer over the Internet or through an electronic network, in response to the user's specified data entry.

4- Transferring the right in exchange for displaying goods or services for sale on Internet sites that operate as an online marketplace, so that buyers submit their bids through an automated procedure and the parties are notified of the sale process via e-mail automatically through a computer.

5- Internet service packages (ISPs) for the information in which the communications component forms an auxiliary and subordinate part (i.e. packages that go beyond just access to the Internet and include other elements such as content pages that allow access to news, weather, travel reports, stadiums, web hosting and access to Online discussions).

6- Website hosting and webpage hosting.

7- Providing digital content for books and other electronic publications.

8- Provide access and subscription to online newspapers and magazines, online news, traffic information and weather reports.

9 - Access or download music, songs, excerpts, ringtones or other sounds.

10 - Accessing or downloading movies, videos or games, including online games that rely on the Internet or other similar electronic networks, where players are geographically distant from each other.

11 - Supply of distance study services.

12 - Supplying advertising space on a website and the rights associated with that advertisement.

13 - Live broadcasting over the Internet.

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Article (30)

The place of supply of electronically supplied services is located at the place of actual use or utilization of these services. The place of actual use of the services or the place of utilization thereof shall be determined as follows:

1- The place of residence of the customer, in the event that the customer is subject to tax, and the place of residence in this case is determined according to the following:

A - The customer's address, as specified in the tax invoice or the documents used to send the invoices.

B - Details of the customer's bank account.

C - The customer's Internet address that is used to receive the telecommunications services and services provided electronically.

D - The international code for the electronic chip that the customer uses to receive telecommunications services and services provided electronically.

E - Any other data of a commercial nature.

2- The place of actual use of these services or their use, in the event that the customer is not subject to tax, and the place of use of the services provided electronically in this case shall be determined according to the following:

A - In the event that receiving services provided electronically requires the actual presence of the customer in a specific fixed location, this site is the place of actual use of these services or benefit from them.

B - The international code for the electronic chip that the customer uses to receive telecommunications services and services supplied electronically.

C - The Internet Protocol (IP) address of the device the customer is using, or any other method that determines the customer's geographical location.

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D - The customer's address specified in the tax invoice or the documents used to send the invoices.

E - Details of the customer's bank account.

And - any other data of a commercial nature.

In all cases, the place of actual use of the services provided electronically, or their utilization thereof, shall be determined according to the tax due date stipulated in Article (26) of the law, and any subsequent changes to the use of the service received shall not affect the determination of the place of supply.

Chapter 3

The Tax due date

Article (31)

The date of the supply is determined for the tax due on the supply of goods or services - in applying the provisions of Clause (1) of Article (26) of the law - according to the following:

1- The date the goods were placed at the disposal of the customer, in relation to the supply of goods without transportation or dispatch.

2- The date of commencement of the transfer or dispatch of goods, in relation to the transactions of supply of goods with the transport or dispatch.

3- The date of completion of the installation or assembly of the goods in relation to the transactions of the supply of goods with the installation or assembly.

4- The actual date of the completion of the services' performance, or the customer receiving and expressly agreeing to them, or when a certificate of completion of services was issued by the client.

5- The date of the occurrence of any of the cases stipulated in Articles (14) and (17) of the Law.

6- The date of canceling the registration of the taxable person, in relation to supplies made as a result of canceling his registration.

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Article (32)

The tax is due on the following cases on the following dates:

1- On the date of supply of goods, for goods placed in safes.

2- On the date of the supply of goods, with regard to the goods deposited and the mortgaged goods by way of security when the depositor or the creditor who owns the pledge, and the tax is due when the depositor or the creditor who owns the pledge deducts a cash amount deposited as a trust in order to finally acquire it.

3- On the tax due date in accordance with Article (26) of the Law, for goods supplied in installments.

4- On the date of payment specified in the invoice or the date of payment, whichever is earlier, and at least once every (12) consecutive months, with respect to operating lease contracts.

5 - On the dates specified in Article (26) of the Law, with regard to the finance lease contract ending with ownership.

6- On the date of delivery of the goods, in the case of forcible expropriation of the goods for consideration.

7- On the date of the customer expressly accepting the goods when they are placed at his disposal as a trial or no later than a month from the date of transferring the goods to him or placing them at his disposal, whichever is earlier.

8- On the date of collection of funds from the machine, for supplies made through vending machines.

Article (33)

“Purchase slips” - in the application of the provision of Article (28) of the Law - means written or electronic instruments whereby a supplier is obligated to accept them as consideration - in whole or in part - in exchange for a supply of goods or services, and on which the nature of the goods or services is written on them or on the commercial documents related to the nature of the goods or services. To be supplied, or the identity of the supplier or potential suppliers of goods or services, divided into two types:

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Purchase vouchers for a specific purpose, which include the following information specified at the time of their issuance:

A - The place of supply of goods and services under which they will be provided.

B - The value of the tax due on the supply of goods and services under which they will be provided.

2- Purchase vouchers for an unspecified purpose.

The provisions of this article shall apply to prepaid calling cards.

Article (34)

The tax is due on purchase vouchers and prepaid communication cards for a specific purpose on the date of issuance and supply of the vouchers or cards for the first time or on the date of their re-supply, and the tax is not due when exchanged for services or goods.

The tax is due on purchase vouchers and prepaid communication cards for an unspecified purpose on the date of their exchange for services or goods. The tax is not due upon issuance and supply of these vouchers or cards for the first time, or on the date of their re-supply.

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The Translator, Muhammad Altaf Hussain, is the Territory Managing Partner for Tax and Advisory practice of AJMS Global in Oman (www.ajmsglobal.com). He may be contacted at [email protected], 968 9414 9519 or 971 50 971 7890.

Disclaimer:

The use of complex legalese language is intentionally avoided in the text herein above to captivate attention and interest of the common layman reader. This LinkedIn article does not comprehensively cover the contents of the provisions laid out in the legal framework of the jurisdiction in question and is likely to present personal opinions of the Author, which may be wrong or misleading, in spite of Author's bona fide intentions to share knowledge through this Article, free of charge to general public, and for which the Author has not received any remuneration from any party. Please use your own discretion before relying on the contents herein above. The Author, or any party associated with him, do not accept any responsibility for any actions taken on the basis of this LinkedIn article.