background image
Oman Publishes VAT Taxpayer Guide on Real Estate — Orbitax Tax News & Alerts

The Oman Tax Authority (OTA) has published an English-language version of the VAT Taxpayer Guide on Real Estate, which was originally issued in Arabic in August 2021. The purpose of the guide is to provide guidance regarding the application of VAT to real estate in Oman, including the sale and rental of residential and commercial properties and services related to real estate.

The general VAT treatment of supplies of real estate property in Oman as per the provisions of the VAT Law and its executive regulations are summarized in the guide as follows:

  • Sale and rent of commercial property (including hotel apartments, warehouses, stores, and car parking) - 5% VAT rate
  • First Supply of residential property - 5% VAT rate
  • Resale of residential property - VAT exempt
  • Undeveloped land - VAT exempt
  • Rental of residential property - VAT exempt
  • A property located within a special zone - 0% VAT rate (zero-rated, with right to deduct input VAT)

However, the guide also provides that the sale of property as part of the full or partial transfer of activity from one taxable person to another taxable person will not be considered a taxable supply for VAT purposes, provided the following main conditions are met:

  • The part of the activity that has been partially transferred is capable of operating by itself;
  • The transferee uses the assets, including the properties to carry out the same type of activity that the transferor is engaged in; and
  • There must not be a series of consecutive transfers of the assets.

In addition to the general guidance on supplies of real estate, the guide also provides detailed guidance in relation to undeveloped land (bare lands), residential real estate, commercial real estate, mixed-use real estate, and other related matters.