Oman Tax Authority Grants Tax Exemptions for Electric Vehicles and Implements New Regulations for Charging

The Oman Tax Authority has made a significant announcement regarding electric vehicles (EVs) and EV parts in the sultanate. As per the latest directive, these items will be exempt from value-added tax (VAT), customs tax, and registration fees. This move aims to encourage the adoption of eco-friendly vehicles and support sustainable transportation in the country.

Under specific conditions outlined by the Tax Authority (TA), zero VAT on EVs will be applicable. To qualify,

• The vehicle must be equipped with a fully electric motor or a hydrogen-powered engine, 
• Must be registered in Oman as an electric car or a zero-emission vehicle (hydrogen) following the prescribed procedures,
• The EV must also meet the approved specifications and standards in Oman,
• The purchase of EVs and their spare parts must be made from individuals or entities holding a registered VAT account in Oman. This requirement ensures proper adherence to tax regulations and streamlines the process for businesses involved in the electric vehicle market.

Importantly, the TA clarified that both VAT-registered and non-registered entities can import EVs or hydrogen-powered vehicles without incurring VAT. This aligns with the procedures established by the General Administration of Customs and the customs tariff applicable to corresponding items.

Simultaneously, the Authority for Public Services Regulation (APSR) has introduced a new regulation governing the charging of electric vehicles. This measure aims to provide a comprehensive framework for the safe and efficient charging infrastructure across the country. 

The tax exemptions and the introduction of charging regulations are expected to bolster the growth of the electric vehicle sector in Oman. The move also aligns with global efforts to reduce carbon emissions and combat climate change.

The Sultanate of Oman joins a growing list of countries worldwide that are incentivizing the use of electric vehicles through tax exemptions and supportive policies. With these initiatives, Oman takes a significant step towards building a sustainable and greener future for its citizens.

You can access Law including Guidelines, Cabinet & FTA Decisions, Public Clarifications, Forms, Business Bulletins for all taxes (Vat, Excise, Customs, Corporate Tax, Transfer Pricing) for all GCC Countries in the Law Section of GCC FinTax.