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June 26, 2026

The Profit Margin Mechanism

VAT Taxpayer Guide

Version 1: June 2023

Contents

1. Introduction

  1. 1.1. About This Guide

  2. 1.2. Who Should Use This Guide?

  3. 1.3. Definitions

2. Registering for VAT

3. What Is the Profit Margin Mechanism?

  1. 3.1. Overview

  2. 3.2. Conditions for Use of Profit Margin Mechanism

    1. 3.2.1. General Conditions

    2. 3.2.2. Supply Conditions

    3. 3.2.3. Types of Used Goods

4. Calculating the VAT Due Under the Profit Margin Mechanism

5. Special Requirements

  1. 5.1. Record Keeping Requirements

  2. 5.2. Invoicing Requirements

    1. 5.2.1. Sales Invoices

    2. 5.2.2. Self-Issued Profit Margin Invoice for Purchases

6. Special Cases

  1. 6.1. Goods Sold Under Part Exchange

7. Input Tax Deduction

Introduction

About This Guide

The purpose of this guide is to provide guidance regarding the application of the Profit Margin Mechanism principles for calculating Value Added Tax on sales of used Goods in Oman, including clarifications regarding the VAT treatment related to the sale of used Goods within the scope of the Taxable Person's regular activities.

The guide reflects the TA's interpretation on the application and treatment of VAT with respect to the VAT Law and the Executive Regulations at the date of issuance of this guide. This is strictly a guideline and may not include some relevant legislative provisions from the VAT legislation. This guide is not binding on the TA, or on any taxpayer in respect of any transaction carried out, and it cannot be relied upon in case of dispute.

For further guidance on specific transactions, you may apply for a ruling, or visit the TA's website at www.taxoman.gov.om.

Who Should Use This Guide?

You should read this guide if the activity of buying and / or selling used goods is within your scope of usual activity.

Definitions

The following defined terms are dealt with in this guide: