Blog

Oman Guide: How the transport sector is affected by Oman VAT Law?

VAT in Oman
How the transport sector is affected by Oman VAT Law?

All the relevant taxation laws and regulations are implemented, measured, and evaluated by Secretariat General for Taxation (SGT) in Oman Sultanate. SGT works in close coordination with Directorate General, both are the branches of the Ministry of Finance, to research, investigate and assess tax implications. 

The transport sector of any country is a major part of its economy providing transit services to people and goods as well as it plays an essential role in enhancing cross-border trade. Hence, under the Common VAT Agreement signed by all members of GCC, there has been given flexibility to each State in relation to the treatment of VAT in the transportation sector. In Oman, the main government body administering the transport sector is the Ministry of Transport which establishes Oman Logistic Centre to oversee segment activities. 

How much VAT is imposed on the Transportation Sector? 

Value Added Tax will not be imposed on companies involved in supplying or operating vehicles that transport goods and passengers, by land, sea, or air. Moreover, businesses involved in the supply of rescue and emergency service aircraft and other vehicles, as well as those operating in supplying crude oil and its derivatives, and natural gas, will also not need to pay VAT.

All the International transportation that is movement from Oman to outside Oman and vice-versa is zero-rated whereas local passenger transport is exempt and local transport of goods is subject to VAT at 5%. As it is a well-known fact that the transportation sector involves freight forwarder, agent, shipping line, feeder operator, etc. thus it is highly recommended to consider and calculate the VAT impact on different charges for providing services. Executive Regulations is expected to provide more clarity on this matter. 

What is Oman’s strategic objective regarding Omani ports? 

It has been of utmost concern for the Oman government to develop and expand the transportation sector by easing congestion and boosting capacity through investment in infrastructure and technology. This led to the development of new ports and road links, along with route expansion for national airline carriers. Now, Omani ports are connected with 86 ports across 40 countries. 

What is the importance of Oman’s favorable location in the transport sector in Oman? 

Transport and logistics have become an essential part of the Government’s national strategy due to its strategic location at the south-eastern coast of the Arabian Peninsula, especially for the movement of goods and people by sea and air. It is also one of the five key areas in the Oman Sultanate’s efforts to diversify away from its dependence on hydrocarbons. 

For enquiries, E-mail: info@aviaanaccounting.com

 

Related Articles:

How does Oman VAT Law impact Real Estate Sector?

What is Zero Rated and Exempt Supply Under VAT in Oman?

How to De-register for VAT in Oman?

What Is The VAT Impact On Precious Metals Sector In Oman?

What Is The VAT Impact On Food & Beverages Sector In Oman?

What is the VAT impact on Retail sector in Oman?

Fines and Penalties in VAT Oman

What is the Adjustment of VAT in Oman?

What is the Place of Supply of Services for VAT in Oman?

What Is The VAT Impact On Medical Sector In Oman?

VAT Registration in Oman: Portal Guidelines

VAT Law in Oman

Tax Invoices and Records in VAT Oman

Place of Supply in VAT Oman

What are Input Tax and its treatment for VAT in Oman?

Top Best Tax Agent in Dubai, Abu Dhabi, UAE | FTA Approved and Registered

Advantages of hiring Tax Agent in Dubai

Which is the Eligibility criteria and requirements to become a tax agent in Dubai?

Which are the Valuable Assistance Tax Agents Can Add To Your Business in Dubai?

Duties and Eligibility for Tax Agent in Dubai

What Is The VAT Impact On Trading Sector In Saudi Arabia

What Is The VAT Impact On Non-Profit Organizations In Saudi Arabia?

What Is The VAT Impact On The Telecommunications Sector In Saudi Arabia?

Tax Representative, VAT Fiscal Representative KSA

What Is The VAT Impact On The Services Sector In Saudi Arabia?

What Is The VAT Impact On Non-Profit Organizations In Saudi Arabia?

Top VAT Services Firm in Riyadh, Dammam, Jeddah, KSA

What Is The VAT Impact On The Telecommunications Sector In Saudi Arabia?

Tax Representative, VAT Fiscal Representative KSA

What Is The VAT Impact On The Services Sector In Saudi Arabia?