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June 26, 2026

Capital Assets

VAT Taxpayer Guide

Version 1 | June 2023

Contents

1. Introduction

  1. 1.1. What is this guide about?

  2. 1.2. Who should use this guide?

  3. 1.3. Definitions

2. What are Capital Assets?

  1. 2.1. Value of Capital Assets

  2. 2.2. Additions to capital assets and refurbishments

3. Input Tax Deduction on Initial Acquisition of Capital Assets

  1. 3.1. Deduction - General principles

  2. 3.2. Partial deduction

  3. 3.3. Assets purchased before registration

4. Adjustments for change in use

  1. 4.1. What is a change in use?

  2. 4.2. Adjustment Period

  3. 4.3. Annual adjustment

5. Sale or disposal of Capital Assets

  1. 5.1. Disposal of assets during Adjustment Period

  2. 5.2. Sale of assets after Adjustment Period

  3. 5.3. Obsolete assets

6. Assigning Capital Assets in other cases

Introduction

What is this Guide about?

This guide has been issued by the Sultanate of Oman Tax Authority ('TA') to provide additional interpretation and guidance for the application of the VAT Law and its corresponding Executive Regulations surrounding the purchase and use of capital assets.

Capital assets are used in the business activity for an extended useful life. In some cases, the usage of the asset changes over this useful life. Due to the possibility of changes to the asset's use, special rules are prescribed to monitor usage over the useful life and make adjustments to input tax deduction where necessary. This guide explains these special rules, and other relevant considerations for capital assets.

The TA has adopted 'Administrative Practices' which are highlighted in italics where relevant – Administrative Practices are administrative approaches accepted by the TA following consultation with the industry, to facilitate taxpayers' compliance with VAT obligations.

This guide is intended to provide a general overview of the rules applying to capital assets. For further guidance on specific transactions, or for matters not addressed by this guide, please get in touch with the TA. General information about VAT in Oman can be found in the VAT portal of the TA website: www.taxoman.gov.om.

Who should use this Guide?

You should read this guide if you purchase or use capital assets in your business activities.

Definitions