Oman imposes excise tax on goods that are harmful to human health or the environment, or luxury goods, at two main rates: 100% on tobacco and its products, pork products, alcoholic beverages and energy drinks, and 50% on carbonated beverages and sweetened beverages.
Excise Goods and Their Tax Categories
A ministerial decision issued under the Excise Tax Law determined the types of excise goods and the tax category for each according to the following table: tobacco and its products 100%, pork products 100%, alcoholic beverages 100%, energy drinks 100%, and carbonated beverages 50%. Sweetened beverages were later added to the list of excise goods at a tax category of 50%.
The Obligation to Register with the Tax Secretariat
Anyone who produces or imports excise goods, releases them for consumption, possesses them without having paid the tax on them, or is licensed to operate a tax warehouse, must apply to register with the Tax Secretariat in accordance with the conditions and controls set by the executive regulations.
The Tax Period and the Deadline for Filing the Return
The tax period for excise tax is set at three calendar months within the tax year, and a registrant must submit a tax return to the Tax Secretariat within 30 days following the end of the tax period, including the types of excise goods, their quantities and value, and the value of the tax due on them.
The Basis for Calculating the Value of an Excise Good
The value of a taxable excise good is calculated on the basis of its retail selling price as determined by the person liable for the tax, or the standard price issued by the Tax Secretariat, whichever is higher, without this price including the value of the excise tax itself or the value added tax where applicable.
How Excise Tax Differs from VAT
Excise tax differs from value added tax in that it is not imposed on most goods and services, but is instead limited to a specific category of goods harmful to health or the environment, or luxury goods, and it is usually imposed when a good is released for consumption for the first time rather than at every stage of supply as is the case with VAT. The fact that its rates reach as high as 100% for some categories also means its effect on the final selling price to the consumer is far greater than the effect of VAT, which applies at a much lower standard rate.
Legal References
- Ministry of Finance: Ministerial Decision No. 112/2019 on Determining the Value and Types of Excise Goods and the Tax Category for Each No. 112 of 2019 — Article Two.
- Tax Authority: Decision No. 34/2020 Amending Certain Provisions of Decision No. 112/2019 No. 34 of 2020 — Article Three.
- Royal Decree No. 23/2019 Promulgating the Excise Tax Law No. 23 of 2019 — Articles 16 and 29
For questions about your specific situation, you can ask the Oman Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.