Oman: Transactions involving excise tax warehouses, when excise tax is suspended

Guidance regarding the fee to be paid when businesses apply for a license to operate an excise tax warehouse

When excise tax is suspended

The tax authority issued guidance (Ministerial Decision 339/2021) regarding the fee to be paid when businesses apply for a license to operate an excise tax warehouse. The amount of the fee generally is based on the value of the bank guarantee submitted by the business at the time of the application to establish or renew an excise tax warehouse.  

Excise tax warehouse

Oman allows businesses to apply for a license to operate an excise tax warehouse when the applicant is registered for excise tax purposes; the applicant uses the specified form to establish an excise warehouse; the applicant submits a bank guarantee; and the location of the excise warehouse and other conditions are satisfied (among other criteria).

In the context of an excise tax warehouse, excise tax is suspended with regard to:

  • Receipt, storage or production of excise goods in an excise warehouse
  • Transportation of excise goods in the following situations—
    • From one excise tax warehouse to another excise tax warehouse in Oman
    • From an excise tax warehouse in Oman to another excise tax warehouse in any other Gulf Cooperation Council (GCC) country
    • From an excise tax warehouse in any other GCC country to an excise tax warehouse in Oman
    • From a point of import in Oman to an excise tax warehouse in Oman
    • From an excise tax warehouse in Oman to a point of export in any other GCC country, for export or re-export outside the GCC

KPMG observation

Excise tax warehouses afford businesses in Oman an opportunity for tax planning and ultimately for optimizing cash flow and profitability. However, before applying for a license to operate an excise tax warehouse, businesses need to understand the compliance obligations and the potential consequences of non-compliance. 

Read a December 2021 report prepared by the KPMG member firm in Oman

 

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