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Special zones in Oman

Special Economic Zone at Duqm (SEZAD) and the Free Zones in Salalah, Sohar, and Al Mazunah are classified as “Special Zones”, as of 27th of April by the public authority for special economic zones and free zones (OPAZ).

This is in line with the OMAN VAT Law and executive regulations.

The supply of goods and services to, from, or within these special zones can be zero-rated, subject to fulfillment of the conditions mentioned in Executive regulations, within Article 54.

Requirements for zero-rating of supplying or transporting goods to or within these Special Zones comprise of:

  1. The taxable person who is “subject to VAT”. The person should be licensed and registered by the operating and supervising authority of the special zone to execute any activity within this zone.
  2. The purpose of which the taxable person has conducted an activity within this special zone.
  3. An example of the goods that do not fall under this criteria are expenses on which no output can be recovered.
  4. Documents proving transfer of goods within or in between special zones must be kept safely and approved by the entity operating and supervising the special zone. This also takes into consideration, the documents issued by the Oman customs authority, in regards to the supply or transportation of goods to, from, or within special zones.

Requirements for zero-rating of supply of services to Special Zones include:

  • The taxable person should be registered for VAT.
  • The taxable person must be licensed and registered by the Authority operating and supervising the Special Zone.
  • The taxable person has received proof of the services for activity in the Special Zone.
  • These services do not include restaurants and hotels, food, and beverage or undertakings any cultural, artistic, sports, educational, and entertainment services.
  • The services should not be exempt from VAT.

Release of the list of zero-rated medical items

The Ministry of Health in Oman has recently released the latest list of medical equipment and medicines (in Arabic) which would be zero-rated under VAT in Oman.

Click here for the list!

Clarification on necessary certifications for zero-rating Oil and Gas related Supplies are:

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