Oman Updates VAT Rules for UAE Imports and Refund Options

Oman has introduced new VAT rules to make it easier for companies to import goods from the UAE and other GCC countries. These updates are aimed at reducing tax hassles, simplifying paperwork, and encouraging smoother trade within the region.
The Omani Tax Authority issued a clarification explaining how businesses can handle VAT when buying goods from the UAE. The rules also cover what to do if VAT is paid at the time of purchase.
This guide explains everything businesses need to know about these new procedures.
Understanding VAT in Oman
Oman introduced VAT in April 2021 at a rate of 5%, in line with other GCC countries. Some goods and services are exempt or zero-rated, especially in export transactions.
The new clarification focuses on helping businesses that import goods from the UAE and other GCC countries avoid unnecessary VAT payments and navigate refunds more efficiently.
Key Points of the New VAT Rules
Zero-Rated Exports
Omani companies can now import goods from the UAE and classify them as zero-rated exports. This means no VAT is charged if certain conditions are met:
- Direct Shipment: Goods must be shipped directly from the UAE to Oman.
- Proper Documentation: An export declaration and other required export documents must be submitted according to UAE tax laws.
By using this method, businesses avoid paying VAT upfront, reducing initial costs.
VAT Refund Options
Sometimes, VAT may be paid when purchasing goods. The Omani Tax Authority explains two ways to recover it:
- Supplier-Issued Credit Note:
The UAE supplier can issue a credit note after the export is verified with an export declaration. This refunds the VAT directly to the buyer. - Direct Refund via UAE Tax Authority:
Companies can apply for a VAT refund directly using the Business Visitor VAT Refund Form.- This is only for companies that do not have a branch or permanent establishment in the UAE.
These options give businesses flexibility in how they recover VAT payments.
Why These Changes Matter
Easier Compliance
The new rules make it easier for Omani companies to follow VAT laws. Clear steps for export documentation and refund processes reduce paperwork and administrative work.
Stronger Trade Links
By aligning VAT rules with other GCC countries, Oman promotes smoother trade and economic cooperation within the region. Businesses can import goods more efficiently, reducing delays and costs.
Cost Savings
With zero-rated exports and faster refund options, companies can save money. They pay less upfront VAT and can get refunds more quickly, improving cash flow and freeing resources for other business needs.
Steps for Omani Businesses
To take advantage of these VAT updates, businesses should:
- Check Export Documents: Ensure all required paperwork, including export declarations, is completed correctly.
- Choose the Right Refund Option: Decide whether to use a credit note from the supplier or apply directly to the UAE Federal Tax Authority.
- Keep Records: Maintain detailed records of purchases, exports, and VAT refunds for audits.
- Stay Updated: Follow updates from the Omani Tax Authority and UAE Federal Tax Authority to remain compliant.
Benefits for Omani Companies
- Simplified VAT Process: Less hassle with paperwork and calculations.
- Faster Refunds: Get back paid VAT quickly using the most convenient method.
- Improved Cash Flow: Reduce upfront costs and allocate funds more efficiently.
- Better Trade Opportunities: Easier imports encourage expansion into GCC markets.