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Oman excise tax update – mandatory excise tax compliance

Oman excise tax update

Excise tax was introduced in Oman with effect from 15 June 2019.

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Reduction in rate of excise tax on alcohol
 
According to Ministerial Decision 112/2019 published on 2 June 2019 (Ministerial Decision), the rate of excise tax on carbonated drinks is 50 percent and alcohol, energy drinks, pork products, and tobacco products was 100 percent. 
 
The Secretariat General of Taxation, Ministry of Finance (SGT) has confirmed a temporary reduction in the rate of excise tax on alcohol to 50 percent by updating the standard list price with the revised excise tax rates. However, the Ministerial Decision has not been amended to reflect the reduction.
 
Extension in time limit for filing transitional excise tax return
 
According to Article 15 of Decree Law 23/2019 published on 17 March 2019 (Oman Excise Tax Law), transitional return of excise tax declaring the inventory of excise goods held by businesses as on midnight of 14 June 2019 was due by Sunday 30 June 2019. 
 
The SGT has officially confirmed an extension in the time limit from June 30 2019 to Monday, 15 July 2019 by an announcement on their website. However, the Oman Excise Tax Law has not been amended to reflect the extension.  
 
The format of transitional excise tax returns is currently awaited. 
 
Time limit for payment of transitional excise tax liability 
 
Officially the SGT has only confirmed an extension in the time limit for filing of transitional excise tax returns from 30 June 2019 to 15 July 2019.  Although the SGT appears to have informally confirmed that the time limit for payment of transitional excise tax liability is also extended from 30 June 2019 to 15 July 2019, there has been no official/formal confirmation to reflect the extension. 

Currently, the SGT has shared details regarding the bank account where excise tax needs to be remitted, but processes governing payments have not been communicated.  Details regarding the bank account where excise tax needs to be remitted are attached.
 
Payment of excise tax on imports
 
In a joint seminar hosted by the Directorate General of Customs, Royal Oman Police and SGT, the SGT confirmed that excise tax on import of excise goods into Oman on or after 15 June 2019 is payable at the time of customs clearance (not at the time of filing excise tax returns). Currently, the only exception is in case of goods being imported and cleared into an excise tax registered custom bonded warehouse. 
 
There have been several instances where importers have cleared excise goods into Oman after 15 June 2019 without payment of excise tax. It is mandatory for importers to self-assess and declare the excise tax liability on import of excise goods into Oman after 15 June 2019 in the import declaration issued by the SGT and pay the excise tax at the time of customer clearance even if not specifically demanded by the Customs authorities.  Non-payment of excise tax at the time of clearance is likely to be treated as non-compliance by the importer.
 
Other updates
 
The SGT has activated the module for filing of quarterly excise tax returns. Guidance on the format of excise tax returns and filing processes is awaited.   
 
The SGT has activated the module for filing excise tax refund. The format of excise tax refund application is currently awaited and so is guidance on the filing processes and all the circumstances that qualify for an excise tax refund. 
 
If you need any assistance with excise tax implementation in Oman, please contact our tax advisors.

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