The Oman Tax Authority (“OTA”) issued Ministerial Decision 339/2021 (“Decision”) for the determination of license fee on application for a license to operate an excise warehouse.
According to this Decision, the license fee is based on the value of the bank guarantee submitted by the applicant at the time of applying for establishment or renewal of an excise warehouse. The schedule of license fee specified in this Decision is as follows:
# |
Value of bank guarantee |
License fee |
1. |
Below RO 50,000 |
RO 500 |
2. |
RO 50,000 to RO 100,000 |
RO 1,000 |
3. |
RO 100,001 to RO 500,000 |
RO 2,000 |
4. |
RO 500,001 to RO 1,000,000 |
RO 3,000 |
5. |
Above RO 1,000,000 |
RO 5,000 |
Next steps
The Oman Excise Tax legislation allows businesses to apply for a license to operate an excise tax warehouse where, among others:
1. The applicant is registered with the OTA for the purposes of excise tax
2. The applicant evidences financial solvency to establish an excise warehouse
3. The applicant has not been convicted by a court for certain specified crimes
4. The applicant applies for establishment of an excise warehouse in the specified form
5. The applicant submits a bank guarantee for the value and period specified by the OTA
6. The location of the excise warehouse satisfies technical specifications specified by the OTA
7. The applicant complies with all other conditions specified by the OTA in relation to operating of an excise warehouse
In the context of an excise warehouse, excise tax is suspended in case of:
1. Receipt, storage or production of excise goods in an excise warehouse
2. Transportation of excise goods in the following scenarios:
a. from one excise warehouse to another excise warehouse in Oman
b. from an excise warehouse in Oman to another excise warehouse in any other Gulf Cooperation Council (“GCC”) State
c. from an excise warehouse in any other GCC State to an excise warehouse in Oman
d. from a point of import in Oman to an excise warehouse in Oman
e. from an excise warehouse in Oman to a point of export in any other GCC State, for export or re-export outside the GCC
Excise tax warehouses certainly afford businesses in Oman the opportunity for tax planning and ultimately optimizing cash flows and profitability. However, before applying for a license to operate an excise warehouse, it is critical for businesses to understand the compliance obligations and the potential consequences of non-compliance.
KPMG has a dedicated team of experienced indirect tax specialists based in Oman supported by a larger, experienced regional team. If you need assistance with excise tax or other indirect tax related matters in Oman, please reach out to your tax advisors at KPMG or the contacts mentioned below.
