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June 26, 2026

Financial Services Sector

VAT Taxpayer Guide

April 2022

Contents

1. Introduction

  1. 1.1. What is this Guide about?

  2. 1.2. Who should use this Guide?

  3. 1.3. Definitions

2. Registering for VAT

3. Place of Supply

  1. 3.1. Supply of goods or services

  2. 3.2. Place of supply

  3. 3.3. Place of supply of financial services during transitional period

  4. 3.4. Services relating to real estate

  5. 3.5. Supplies of financial services to customers outside the GCC

4. VAT treatment of financial services

  1. 4.1. Taxable financial services

  2. 4.2. Exempt financial services

  3. 4.3. Zero-rated and out-of-scope financial services

  4. 4.4. Compensatory/punitive fees

  5. 4.5. Conventional Banking Products

  6. 4.6. Waiving of customer fees

  7. 4.7. Composite supplies

5. VAT treatment of Islamic financial services

  1. 5.1. Overview

  2. 5.2. Murabaha

  3. 5.3. Musawama

  4. 5.4. Mudaraba

  5. 5.5. Ijara Muntahia Bittamleek

  6. 5.6. Service Ijara

  7. 5.7. Mushakara

  8. 5.8. Diminishing Musharaka

  9. 5.9. Salam

  10. 5.10. Savings and Current deposits - Qard and Mudaraba/Wakala based

  11. 5.11. Term deposits Mudaraba/Wakala based

  12. 5.12. Wakala Bil Istithmaar

  13. 5.13. Istisna'a

  14. 5.14. Ujra credit cards

  15. 5.15. Sukuk

  16. 5.16. Takeover of conventional loans

6. Insurance services

  1. 6.1. VAT treatment of Insurance services

7. Reporting the VAT

  1. 7.1. Tax Due Date

  2. 7.2. Charging VAT

  3. 7.3. Issuing invoices

  4. 7.4. Filing VAT returns

  5. 7.5. Records

  6. 7.6. Certificate of VAT registration

  7. 7.7. Correcting past errors

8. Input Tax

  1. 8.1. Overview

  2. 8.2. Application of input VAT deduction to financial services

  3. 8.3. Partial deduction: Apportionment of input VAT

  4. 8.4. Seeking an alternative proportional recovery method

  5. 8.5. Capital assets

  6. 8.6. Input tax deduction for Islamic Asset Financing

9. Penalties

Disclaimer:

This Guide is intended to provide an understanding of the relevant treatment of financial services under the Sultanate of Oman's Value Added Tax ("VAT") Law and aims to provide a better general understanding of taxpayers' tax obligations. It is not intended to comprehensively address all possible tax issues that may arise – taxpayers are reminded that it is their responsibility to ensure that their obligations are met in their own facts or circumstances. While the Sultanate of Oman's Tax Authority ("TA") has taken the initiative to ensure that all information contained in this Guide is correct, the TA will not be responsible for any mistakes and inaccuracies that may be contained, or any financial loss or other loss incurred using the information from this Guide. All information is current at the time of preparation and is subject to change.

Copyright info:

Copyright 2022 Sultanate of Oman Tax Authority. All rights reserved.