Oman Guide: What is the VAT for Free Zones in Oman?
VAT Law in Oman stipulates that supplies of goods or services to or from the Special Zones, or within them, may be zero-rated. The Special Economic Zone in Duqm and the Free Zones in Salalah, Sohar, and Al Mazyunah have been classified as Special Zones by the provisions of the VAT Executive Regulations in Oman. Tax authorities in Oman will publish detailed procedures applying VAT at zero rates in the Special Zones, companies, enterprises, businesses, and establishments. It also includes conditions for VAT Registration and VAT Administration.
How does VAT Registration for Free Zones in Oman work?
Companies, establishments, enterprises, or persons working in the Special Zone are taxable at a zero rate. They must apply for authorization and VAT registration in Oman. Applications submitted through the electronic portal of the Tax Authority in Oman.
It is also necessary to prove that a person has a valid license and registration in the Special Zone. The VAT registrant in Oman must attach to the VAT registration application:
- a copy of the commercial registration certificate; and
- a copy of the license certificate.
issued by the relevant Special Zone Authority in Oman for carrying out economic activity.
How is VAT Administered for Transporting Goods in Oman?
Supplying or transporting goods to or within Special Zones, the VAT Executive Regulations in Oman stipulates:
- The customer or the recipient is subject to Tax.
- The customer or the recipient be licensed and registered by the operating and supervising authority. The free zone to conduct the activity within the Special Zone in Oman.
- The customer or the recipient has received the goods for the activity within the place.
- The goods shall not be among the goods excluded from the right of deduction by the provisions of the Executive Regulations in Oman.
Everyone must keep documents to prove the transfer of goods in the special zones. The entity operating and supervising the Special Zone in Oman concerning the supply of goods within the Special Zone must issue certification. It also includes documents issued by Oman Customs concerning the supply and transportation of goods to the Special Zone or from one Special Zone to another.
How is VAT Administered for Services in Oman?
Supply of services to a Special Zone that requires:
- The customer is registered for VAT by the VAT registration rules in Oman.
- The client must be a person licensed and registered in operating and supervising the Special Zone.
- The client has received services for activity in the Special Zone in Oman.
- It doesn’t include restaurant and hotel services, food and beverage undertakings, and cultural, artistic, sports, educational, and entertainment services provided for in the VAT Law. The services should not be exempt from VAT in Oman.