Oman VAT on services to foreign clients: zero-rating and the evidence the tax authority expects

A Muscat engineering design firm invoices a client in Mumbai OMR 7,800 for structural drawings. The client asks why there is no VAT. The firm's finance manager explains that exports of services to customers outside the GCC are zero-rated, and points to the file: contract, the client's registration in India, and the delivery records showing the drawings went to Mumbai.

Oman's VAT

Oman introduced VAT on 16 April 2021 at a standard rate of 5 percent, the lowest of the GCC states that have VAT. The Tax Authority administers it.

Zero-rated exports of services

A service can be zero-rated when:

• the customer has no place of residence in Oman or another GCC implementing state, and
• the service is used or benefited from outside Oman and those states,

along with conditions in the VAT law and its regulations. Services related to property in Oman, or used in Oman, do not qualify.

Evidence

For each foreign client, keep:

1. The contract.
2. The client's registration and address abroad.
3. The invoice at 0 percent, with the reason.
4. Evidence of use abroad.

GCC clients

Supplies to clients in other GCC states follow specific rules. Do not assume a service to a UAE or Saudi client is an export in the same way.

Collecting from foreign clients

The Omani rial is pegged to the dollar. Clients in India, Europe or the US pay by international transfer, which can be slow and lose fees. US, euro and sterling details let clients in those regions pay domestically.

Where Rivet fits

A Rivet business account accepts registered companies after verification, including Omani companies, subject to local rules. Approved companies get US account details on every plan and euro and sterling details from the Growth plan, in their own name. Payments are matched to invoices, keeping export evidence together. Rivet is not a bank; regulated partner institutions hold the funds.