Tariff & Non-Tariff Barriers

As a member of GCC council, most imported goods are subjected to 5 percent import duty rate (CIF). Tobacco, alcohol, and pork products are subjected to 100 percent import duty. Protective tariffs ranging from 10 percent to 50 percent are imposed on some goods.

Certain goods such as sugar, wheat flour, corn, rice, fresh fruits and vegetables, fresh and chilled meat and poultry, bulk edible oils, barley, powdered and unsweetened concentrated milk & tea; may be imported duty-free. This is in addition to agricultural machineries, seeds, live plants, fertilizers, and insecticides; books; refined petroleum products, some basic food items and goods imported by the government.

Also, Joint venture industrial projects may import their equipment and raw materials duty-free.

For more detailed information on tariffs, businessmen can contact Oman Chamber of Commerce & Industry in Oman or the Intra Arab Trade Info Network (IATIN) headquarters-Trade Info Section. Queries should be for detailed products.

Ad Valorem Duties: As a WTO member, Oman has implemented the WTO customs Valuation Code (Article VII of the GATT). i.e. the five methods for the determination of customs valuation including customs valuation based on either FOB or CIF value.

Preferential Duties: Oman is a member of the Gulf Cooperation Council (GCC) established in 1981. The council aims at achieving coordination and integration among its member states (Bahrain, Kuwait, Qatar, Saudi Arabia, and United Arab Emirates, in addition to Oman) in all fields, including economic and financial affairs, commerce, and customs. The council achieved significant strides intra-regional economic cooperation, including efforts to unify customs regulations and tariffs. To this end, Goods Exported from GCC member states enjoys duty free treatment if the added value of the product is at least 40 percent effected in other GCC member countries and the capital of the exporting/manufacturing firm is at least 51 percent owned by citizens of GCC countries.

The GCC a adopted full customs union since January 2003 with a 5% tariff on most goods traded among its member countries. Also, a common currency will be in force by 2010.

Furthermore, it is expected that the GCC will lead to an agreement between the member countries and the EU for cooperation in transfer of technology, energy and investment.

As a member of the Arab league, Oman along other Arab states including Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanese, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, and the United Arab Emirates, agreed in 1996 to create an Arab Free Trade Area by 2007 and are reducing their tariffs by 10 percent annually to reach the free trade zone over 10 years. Lately, last September 2003, Arab league agreed to expedite the free trade area to commence by 2005 instead of 2007.

Customs Surcharges: No customs surcharges imposed.

Non-Tariff Controls
Generally, all imports require an import license; Importers must be licensed & registered with the Ministry of Commerce and Industry and the Oman Chamber of Commerce and Industry. Importers must be Omani citizens, and import companies must be at least 30 percent owned by Omani. Importation of vegetables and fruit is seasonally band to protect local produce.

Imports of pharmaceuticals, alcoholic beverage, and defense equipment require special authorization.

Imports of a few commodities are prohibited for reasons of heath, security, or public policy.

Import Payments and Exchange Controls
The only exchange control authority in Oman is the central bank. There are no exchange control regulations.

There are no restrictions on advance payments and no mandatory minimum or maximum credits on imports.

Samples and Advertising Materials
Unfit for sale merchandise samples, may be imported duty-free.

Books, videotapes and Compact Disks may be subject to review by customs upon entry.

In an effort to attract foreign investment, Oman extended the national tax treatment to joint ventures with up to 70 percent foreign participation. In such cases, companies would be taxed (on taxable income above $ 78,000) at a single rate of 12 percent from tax year 2001. Previously this rate was only available to companies with a maximum of 49 percent foreign participation. Further, mixed companies with a foreign participation of more than 70 percent are taxed on a progressive rate up to a maximum of 30 percent. Previously companies in this category were subject to 50 percent taxes.

Additionally, Oman in late 1996 imposed a 10 percent withholding tax on gross income of foreign firms, including remittances to parent companies, as a tax on foreign services. Oman also levies a tax on companies of RO 110 per year (about $286) for each foreign employee.