Excise Tax Service
Excise Tax is a form of indirect tax levied on specific goods. These goods are typically those that are harmful to human health or the environment. The intent of Excise Tax is to reduce consumption of these commodities while also raising revenues for the government that can be spent on public services.
Oman’s Secretariat General for Taxation (SGT) released announcements on 13 June 2019 and 20 June 2019, providing updates to the Excise Tax Law that was published in the official gazette on 17 March 2019 and came into effect on 15 June 2019 (Royal Decree 23/2019).
Tobacco and tobacco products are subject to a 100% rate. The definition covers all tobacco products set forth in Chapter 24 of the Unified Customs Coding (UCC) of the Gulf Co-operation Council (GCC) imported or grown and produced in Oman.
Pork products are subject to a 100% rate. The definition covers all port meat, parts, pig fat and all its by-products that are edible whether fresh, cooled, frozen, dried, salted and other by-products of pork that are categorized as Goods of Special Nature in the UCC of the GCC.
Alcoholic beverages are subject to a 100% rate, but the SGT has confirmed that the rate is temporarily reduced to 50% for six months. The definition covers drinks that contain a specific percentage of alcohol, including alcoholic beverages that are categorized as Goods of Special Nature in the UCC of the GCC.
Energy drinks are subject to a 100% rate. The definition covers any drinks that contain stimulant materials, or motivate the brain or body, and includes caffeine, taurine, jinxing and juana. Also, any concentrates, solutions, gels or extracts that may be converted to energy drinks also are considered as energy drinks.
Carbonated drinks are subject to a 50% rate. Any manufactured drinks that have preservative items, gases and flavours added that it gives a unique taste that is different from another kind. Any concentrates, solutions, gels or extracts that may be converted to carbonated drinks also are considered carbonated drinks.
As in other GCC countries that have implemented Excise Tax, and in line with the provisions set out in GCC Common Excise Tax Agreement, the tax will be calculated on the higher of:
The standard price of the goods determined by the SGT, or The retail sales price (RSP) declared by the producer, importer, or tax warehouse licensee.
Every person who produces, imports or holds excisable goods in Oman is required to register for excise tax. As an exception, a person who imports excisable goods on an irregular basis will not be required to register for excise tax.
- date of import of excisable goods;
- date on which the excisable goods is released for consumption; and
- date when excisable goods are offered for personal consumption (not relating to the practice of business or activity) within free zones or special economic zones.
Import of Excisable Goods: The importer of excisable goods is required to notify the SGT of the types of imported goods as well as their quantity, value and the value of tax paid to the Directorate General of Customs (“DGC”). The DGC will collect the tax on imported goods subject to excise and the value prescribed, and will then deposit the same in a special account to be opened for excise tax purposes. In the event of suspended payment of customs duty, the importer of excisable goods will furnish to the DGC a bank guarantee equivalent to the amount of the tax due and such bank guarantee can only be released after the excise tax is paid.Excise Tax Exemption: Oman will exempt
- excisable goods received by the diplomatic and consular bodies, international organizations, heads and members of the diplomatic and consular corps within Oman, on condition of reciprocity; and
- excisable goods held by passengers coming to the Oman provided goods are not brought for commercial purposes and meet the GCC Common Customs Law requirements.
Transitional Excise Tax Return: The Implementation Guide on Excise Tax sets out the procedure to submit a one off excise tax return for the transitional period. In addition to importers, producers and warehouse operators, businesses that own or intend to sell excise goods for commercial purposes are required to submit a transitional excise tax return by 30 June 2019.
Excise Tax Returns: Will be required to be submitted within three months following the end of the tax period.
Excise Tax Payment: The payment of tax will become due on the date of submission of the excise tax return.
Taxpayers may use the SGT’s electronic system for registration, submission of tax returns and payment of tax.
The Excise Tax Law imposes penalties for non-compliance with tax obligations and tax evasion. The penalties may include imprisonment of 2 months to 3 years and/or fine up to OMR 20,000.
Appeals: The registered person can appeal against the assessment of the tax or against the amendment of the tax return issued by the SGT within 45 days from the date of its knowledge of the assessment or amendment. The registered person can further appeal against the decision of the Committee to the Court of First Instance.
Taxpayers involved in importing, producing or storing Excise Goods will be required to abide by compliance requirements including:Registering for Excise Tax purposes and submitting periodic returns and payments
- Ensuring IT systems are configured to manage the risk of non-compliance Maintaining Excise Tax records for 5 years (electronically or via hard copies)
- Complying with inventory control systems with respect to the Excise Tax suspension arrangements
- Keeping customs and transport documentation related to the movement of Excise Goods.