Procedures for applying Value Added Tax (VAT) in Special economic Zones

Overview

The provisions of Article (54) of the VAT Law (Royal Decree No. 121/2020) stipulates that supplies of goods or services to or from the Special Zones, or within them, may be zero-rated following the conditions laid down in Articles of (101) to (107) of the VAT Executive Regulations (Decision 53/2021). We would like to inform you that the Special Economic Zone in Duqm and the Free Zones in Salalah, Sohar, and Al Mazyunah have thereby been classified as Special Zones in accordance with the provisions of Article (102) of the VAT Executive Regulations.

Tax Authority will publish detailed procedures for the purposes of applying VAT at a rate of zero percent in the Special Zones, companies, enterprises, businesses and establishments operating in these areas must comply with the conditions stipulated in the VAT Executive Regulations. These conditions include VAT Registration and VAT Administration as detailed below.

VAT Registration

Companies, establishments, enterprises or persons working in the Special Zone (whether SEZAD, Free Zone) and whose entire supplies of goods or services are taxable at the zero rate, must apply to the Authority for authorization and VAT registration. Applications may be submitted through the electronic portal of the Tax Authority through the following link: https://www.taxoman.gov.om/

It is also necessary to prove that you have a valid license and registration in the Special Zone. The VAT registrant must attach to the VAT registration application:

• a copy of the commercial registration certificate; and

• a copy of the license certificate.

issued by the relevant Special Zone Authority for carrying out economic activity in the Zone.

VAT Administration