Value-added tax (VAT)
Oman has announced its intention, along with other Gulf Cooperation Council (GCC) member countries, to implement VAT. The implementation date is expected to be sometime in 2020 or 2021 (between 1 July 2020 and 1 January 2021). The rate of VAT will be 5%.
Customs duty of 5% of cost, insurance, and freight (CIF) value applies to most non-GCC source goods. Exemptions apply for certain food items, medical supplies, etc.
The 2019 Oman state budget recently introduced excise tax in Oman with effect from 15 June 2019. Excise tax is levied at the following rates:
- Tobacco (including tobacco derivatives), pork products, and energy drinks: 100%.
- Alcohol and carbonated drinks: 50%.
There are no property taxes in Oman.
Stamp duty is applicable on transfer of land and property at 5% of the value.
There are no payroll taxes in Oman other than social security contributions (see below).
Social security contributions
A 17.5% social security contribution is applicable to employees who are Omani nationals, but not to expatriate employees. The employee pays a contribution of 7% of salary, and the employer pays the balance of 10.5%. The employer is also required to contribute for insurance for work-related injuries in the amount of 1% of the salary of the employee. This brings the total monthly social security and insurance contributions to be made by the employer to 11.5%.
Municipal taxes apply to the following items:
- Property rents: 3%.
- Hotel occupancy: 5%.
- Leisure and cinema houses: 10%.