Value Added Tax (VAT) will come into effect in the Sultanate of Oman in six months’ time. VAT will be applied at a rate of 5 per cent on goods and services when it comes into effect.
According to Oman News Agency, the 5 per cent VAT is one of the lowest compared to international rates, and will have minimal impact on consumers.
The GCC had made a unified agreement on VAT, which was signed by member-states in November 2016, and it defined the principles on which the VAT law is to be based in each GCC state. Every member-state can opt for different tax adjustments.
The Oman Government Communication Centre has shared a series of tweets on what items will be excluded from VAT. Basic food commodities, healthcare services, financial services, education and related goods and services will not attract VAT.
VAT will not apply in land and real estate matters, undeveloped or vacant lands and resale of residential real estate and leasing of real estate for residential purposes.
Public transport services, import of international transport and environmental transport of goods or passengers and the supply of related services will not attract VAT.
VAT will not apply for import of medicines and medical equipment as well as supplies for people with disabilities and charities.
Import of gold, silver and platinum as investment; import of maritime, air and land transport vehicles for transport of goods and passengers for commercial purposes and related services; and import of aircraft, rescue ships and such products are out of the purview of VAT.
There will be no VAT charged on the import of natural gas and crude oil, and oil products and derivatives.