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Oman had introduced excise tax on alcohol and alcohol products, energy drinks, carbonated drinks, pork and pork products, and tobacco and tobacco products with effect from 15 June 2019.

According to Ministerial Decision 112/2019, on determination of value, types of excise goods and rate of tax imposed on each of such goods, published on 2 June 2019 (Ministerial Decision), alcohol and alcohol products were subject to excise tax at the rate of 100%. The Oman Tax Authority implemented a temporary reduction in the rate of excise tax on alcohol and alcohol products to 50%. The Ministerial Decision was, however, not amended to reflect the temporary reduction.

The Oman Tax Authority has now removed the temporary reduction and reverted to the original rate of excise tax on alcohol and alcohol products, which is 100%. This will take effect from 1 July 2020.

This means that within 15 days of the effective date of increase in the excise tax rate, i.e. by 15 July 2020, businesses in possession of alcohol and alcohol products as on 1 July 2020 will be required to:

  • report the inventory of such goods (through transitional declaration/returns); and
  • pay the differential excise tax on the inventory.

In order to ensure accurate submissions and evidence in the event of a future audit by the Oman Tax Authority, it would also be advisable for affected businesses to undertake a stock count of alcohol and alcohol products in possession as on 1 July 2020.

If you need any assistance with excise tax compliances, please reach out to your tax advisors at KPMG or the contacts mentioned below for further information.