MUSCAT: Muscat Municipality has warned landlords who lease their properties without registering the agreements to evade the five-per cent administrative fee.
“This kind of tax evasion is affecting the collection of revenues due to the municipality," the statement posted in its twitter handle said.
The municipality stated that all lease agreements or contracts should be registered with it along with an administrative charge of 5 per cent of the total rental value.
Referring to the statement, an official at the municipality said that the number of tax evasion cases has seen a rise in the recent past.
“In some cases, they do not show the real rent amount in deal with the tenants," he said, adding, “the municipality was currently dealing with many cases of undocumented lease agreements."
The Tenancy Law in the Sultanate mandates that the landlord must register the lease contract with the relevant municipality and pay the registration charges.
However, the parties may agree to shift this responsibility to the tenant, and the tenant in any case has the right to register the lease if the landlord fails to do so.
As the law provides important protections to tenants, particularly in the form of rent controls and protections against eviction, even when the duty to register the lease contract falls on the landlord, it usually behooves the tenant to ensure that this contract is duly registered with the municipal authorities.
But in many instances, individual landlords do not want tenancy agreements to be signed. Expatriates with low salaries opt for such accommodations where the rent is fixed at a bargain and is comparably cheap.
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