Oman VAT charges 5% VAT on supplies of taxable goods and services. The company is responsible for collecting his VAT amount and paying it to the authorities. 5% VAT must be charged, but the question remains: how much VAT must be charged?
This is very important. This is because undervaluing goods and services leads to a reduction in tax liability and leads to a violation of tax liability. On the other hand, overvaluation leads to loss of sales for the company due to additional taxes and ultimately leads to higher purchasing costs for customers.
To avoid the above situation, the VAT law provides certain guidelines to help determine the shipping amount. Understand the value of VAT in Oman.
Value of Supply in Oman
Value of supply, also known as taxable value, can be defined as the total amount of consideration excluding VAT. Consideration includes all costs, fees and taxes arising from delivery and charged to Customer by Taxable Supplier. Any deductions, allowances, grants or amounts required by law are excluded from the surrender value.
Simply put, the shipping price is the retail price, including all other costs such as packaging and installation costs, and excluding deductions such as discounts and subsidies.
You can easily check shipping prices in the table below. Components that should be excluded or excluded.
Components of delivered quantity
+ Total consideration excluding VAT
+ Costs of packaging, transportation, etc.
+ Other fees
Including 44 44
+ All levies excluding value-added tax
(-) All deductions
(-) All deductions as per regulations
Example of delivery value
A-One Spares Ltd sells spare parts worth Rs 100,000, including packaging charges of Rs 500, to Abdul Traders. At A-One Spares he also offers a discount of OMR 250.
In the above case, the delivery value corresponds to the total price (before VAT). The delivery price is 100,500 (100,000 spare parts + 750 packaging costs – 250 discounts). 5% VAT is calculated on 100,500 or 5025.
Delivery amount including VAT
In the example above, the delivery amount does not include tax and was relatively easy to determine. How can I check if the price includes tax?
It’s very simple, just deduct the VAT amount from the total price (tax included price). Use the following formula to accomplish this:
VAT amount = Total consideration * 5 (VAT rate) / (100 + 5% VAT)
The VAT amount determined using the above formula will be deducted from the total consideration.
Let’s apply this formula to the A-One Spares example above.
The total consideration including VAT is 105,525
To determine the amount supplied, VAT must be reduced from 105,525 according to the following calculation:
105,525 * 5 /105 = 5,025
where: 5,025 will be reduced from the total consideration. Determine the taxable value of the delivery. This will be useful if you receive her VAT invoice from your supplier.
Due to the different nature of supplies, such as fictitious supplies, exports and imports, the VAT Act and Regulations provide different guidelines. It is important to use appropriate methods to determine the values to avoid resulting nonconformities. One way to eliminate this risk is to use VAT software that automates the calculations.
You can also Register for VAT Registration on our website: