VAT on car rental contracts in Oman: what an office needs to know

Oman has applied VAT since 16 April 2021 at a standard rate of 5%. Here is what a rental office needs to know.

Must my office register?

• Registration is mandatory if your annual supplies exceed, or are expected to exceed, OMR 38,500.
• Registration is voluntary if supplies or expenses exceed OMR 19,250.

Is car rental subject to VAT?

Self-drive car rental is generally subject to the standard 5% rate, while other activities such as local passenger transport are treated differently. Confirm your activity with the Tax Authority.

The tax invoice

A registered office issues a tax invoice showing its details and VAT number, the rental value, 5% VAT and the total. An unregistered office issues a standard invoice without VAT.

What about traffic fines?

A fine the office collects from the customer and pays to the police passes through the office and is not its revenue, while an admin fee the office adds is taxable revenue.

How Miftahly helps

It issues 5% tax invoices for registered offices and standard invoices for others, separates the fine from the admin fee, and posts the journal entries automatically.

Note: general information, not tax advice. Check with the Tax Authority or your adviser.

_Cover photo: Jakub Żerdzicki on Unsplash_