Implementation version OM-DOMESTIC-2026-10-07.1. Review date: 7 October 2026.
This version implements the first phase: domestic purchase allocation and input-VAT assessment.
It is not the complete Oman tax system. The version date identifies the software, not a statutory commencement date.
The archived RJ module backend/rj_books/vat_service.py already contained checks for registration,
private use, apportionment and invoice evidence. Those checks had not been transferred to the new office.
Its invoice-evidence condition also accepted any attachment as a valid tax invoice. The new implementation uses
separate accountant decisions, supplier VAT details and document type. AI cannot populate those decisions.
Legacy code and previously posted entries have not been changed.
| Rule | Implementation | Test evidence |
|---|---|---|
| Client tax profile | Legal form, activity, VAT registration dates and number, taxable/exempt activity mix. Financial year-end month and income-tax regime are recorded only. | Missing profiles block posting; registration changes recheck unposted documents. |
| Private purchases | Zero business cost and zero input-VAT claim. Company-funded private expenditure goes to owner drawings for sole proprietors or an owner receivable for companies. This assumes an owner purchase, not an employee benefit, salary or dividend. | Private purchase paid by business and owner are tested separately. |
| Mixed use | Documented accountant percentage. Original document VAT stays unchanged. Net and VAT allocations are rounded to baisa; the private residual preserves the total. | 105 OMR / 60% example and fractional-baisa cases. |
| Payment source | Supplier outstanding, business cash, bank clearing, or amount owed to the owner. Owner-funded private portions do not enter business accounts. | Mixed owner-funded purchase credits only the business amount. |
| VAT eligibility | Registration on document date, business use, activity scope, explicit restriction decision, checked tax invoice and supplier VAT number. Unknown evidence stays pending; known non-recoverable VAT becomes business cost or asset cost. | Blocked expenses, unregistered clients, exempt activity, receipts without tax-invoice evidence and pending VAT. |
| Partial exemption | Accountant supplies an evidenced taxable share for mixed activities. This is a provisional allocation, not the annual adjustment calculation. | 60% business use followed by 50% taxable use. |
| Mixed-rate invoices | Separate net bases for standard 5%, zero-rated and exempt supplies; component arithmetic must reconcile to the original totals. Product eligibility is accountant-reviewed. | 60 OMR at 5% plus 40 OMR at 0%; mismatch rejection. |
| Older input VAT | Claims beyond three years from the document quarter-end require tax-point/history review. This conservative check does not determine an alternative legal tax point or reopen a filed period. | Old invoice blocked from ordinary claim workflow. |
| Initial capital purchase | Allocation can debit a fixed-asset account. No depreciation or capital-asset VAT adjustment schedule is generated. | Asset purchase debits fixed assets instead of operating expenses. |
| Posting and traceability | Reassessment during the posting transaction; rules and profile snapshot stored with the posted document. Edits and allocations are audited. Bulk classification preserves exceptions. | Stale ready flags, duplicate posting, cross-client bulk requests and snapshot preservation. |
Oman Tax Authority: Input Tax Guide, May 2023: sections 2.4 (conditions), 2.7 (timing), 2.8 (evidence), 2.9-2.10 (recipient and employee payments), 2.11 (registration), 2.12 (business/private allocation), 2.13 (blocked VAT) and 2.14 (partial exemption). The accountant must substantiate the actual use and any exception to a restriction. A business expense and a VAT deduction are separate decisions.
Oman Tax Authority: deductible expenses is relevant to the future taxable-profit calculation. The business-cost figure here is bookkeeping allocation, not a certification that the expense is deductible for income tax.
Assumptions: sole proprietor, VAT registered on the invoice date, domestic taxable business, eligible tax invoice, no restriction, supplier still unpaid, and documented 60% business use of a 105 OMR telephone bill (100 net + 5 VAT).
| Account | Debit OMR | Credit OMR |
|---|---|---|
| Business expense | 60.000 | |
| Recoverable input VAT | 3.000 | |
| Owner drawings | 42.000 | |
| Supplier payable clearing | 105.000 |
If the owner personally paid the bill, the private 42 OMR stays outside the business journal and the business owes the owner 63 OMR. For a company-funded owner purchase, the private amount uses an owner receivable instead of sole-proprietor drawings. If VAT is still awaiting evidence, the business VAT portion remains in the review account.
Earlier posted documents are preserved and flagged as unassessed in the working paper. Editing a profile never rewrites past journal entries. Arabic and English controls use the same calculation engine. Tests use temporary data; production entries are not test fixtures.