Oman publishes full list of VAT zero-rated food items

Tax Authority’s Decision seeks to minimise the impact of VAT on the final consumer by extending zero rating to over 90 food items

  
VAT increase Some growing stacks of coins with the word VAT on them. Image used for illustrative purpose

VAT increase Some growing stacks of coins with the word VAT on them. Image used for illustrative purpose

Getty Images/Photography taken by Mario Gutiérrez.

More details have emerged of the complete range of food products that have been zero-rated for Value Added Tax (VAT), which is due to come into force in the Sultanate with effect from April 16, 2021 — part of reforms by the Omani government to shore up non-oil revenues.

The Tax Authority’s Decision 2/2021 on the Determination of Food Items subject to VAT came into effect yesterday, January 11, following its publication in the Official Gazette. It provides a full list of food items eligible for zero rate of VAT, according to well-known professional services firm KPMG.

In an advisory to customers, KPMG said the Tax Authority’s Decision seeks to minimise the impact of VAT on the final consumer by extending zero rating to over 90 food items.

“The list of food items zero- rated for the purposes of VAT largely resembles the list of food items exempt from Customs duty. Food items that are not specifically zero-rated would attract VAT at the standard rate of 5 per cent.

Therefore, for businesses, classification of the goods will be critical to ascertain their correct tax treatment. The tax treatment, among others, will impact the pricing, documentation and system configuration. Incorrect tax treatment could result in over/underpayment of VAT and lead to penalties’’, the multinational audit, tax and advisory services firm noted.

KPMG made available a complete breakdown of the food items zero-rated for VAT that are distributed across 12 broad categories. The list is as follows:

Poultry, Meat and Fish: Layer chicken; Broiler chicken; Chicken weighing not more than 185 grams from Gallus Domesticos Species; Full and half carcasses of bovine animals; Bovine meat cuts with bones, Boneless bovine meat; Full and half carcasses of lamb, Full and half carcasses of sheep; Sheep meat cuts with bones; Boneless sheep meat; Full and half carcasses of goat; Goat meat with bones; Boneless goat meat; Offal and other parts of sheep or goat; Meat, offal and other parts of camel and other camelids; Frozen meat, offal and other parts of camel and other camelids; Yellowfin tuna (Thunnus albacares); Bigeye tuna (Thunnus obesus); Atlantic and pacific bluefins tuna (Thunnus, Thynnus, Thunnus orientalis); Southern bluefin tuna (Thunnus maccoyii); Longtail tuna (Thunnus tungle); Kawakawa (Thunnus Avinus); Mackerel (Kingfish, soitted soabusg mackerel); Trevally; Seabream (Sparidae); Grouper (example Hamor, Bertam, Chenino, Cato, Nagel, Samman); Shei’ri fish (Sheoor); Hamra fish (Alesmaudi); Nagroor fish; Bori fish (Meed and Biyah); Safi fish, and Barracuda.

Dairy Products: Long life milk in containers exceeding 1 litre; Milk in powder, granular or solid form, of fat content by weight exceeding 1.5 per cent, not containing added sugar or sweetener; Fresh Yoghurt; Fresh (unripe or uncured) cheese, including whey cheese and curd.

Fresh Eggs: Fresh eggs of fowls of the species Gallus Domesticus (Fresh chicken eggs)

Fruits and Vegetables: Potatoes; Tomatoes; Onions for food (green or dry rind); Garlic; Cabbage lettuce (head lettuce); Carrots and turnips; Cucumbers and gherkins; Peas (pisum sativum); Beans (Vigna spp, Phaseolus spp); Other beans, fresh or chilled Aubergines (egg-plants); Fruits of the genus Capsicum or of the genus Pimenta; Spinach, New Zealand spinach and orache spinach (garden spinach); Olives; Pumpkins, squash and gourds (Cucurbita spp.); Marrow; Okra; Parsley; Coriander; Fresh dates; Pressed dates; Pineapples; Guavas; Mangoes; Oranges; Mandarin (tangerines & satsumas), clementines, wilkings and citrus hybrids; Fresh lemons; Dried lemons; Fresh grapes; Watermelons Green Melon; Yellow melons; Apples; Pears; Apricots; Sour cherroes (prunus cerasus); Kiwifruit and Pomegranates.
Coffee beans, tea and cardamom: Unroasted coffee beans (not decaffeinated); Roasted coffee beans (not decaffeinated); Green tea (not fermented), in packages not exceeding 3 kilograms; Other green tea (not fermented); Tea bags not exceeding 3 grams each; Other black tea (fermented) and other partly fermented tea; Cardamom (neither crushed nor ground); Crushed or ground cardamom;

Grains: Normal wheat; Thin wheat; Semi-milled or wholly milled rice, whether or not polished or glazed and Wheat flour.
Olive oil and its fractions, whether or not refined, but not chemically modified: Virgin olive oil.

Sugar: Refined sugar (fine crystals)

Baby food supplies: Infant and baby food based on milk or malted milk prepared as substitute of mother’s milk, not containing cocoa.

Breads: Ordinary bread of any kind.

Water: Artificial mineral water; Ordinary natural water

Salt: Common salt (table salt).

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