Does Oman Have Income Tax?
Short Answer
No, Oman does not impose a personal income tax on individuals. There is no tax on salaries, wages, or personal investment income for either Omani nationals or expatriate residents. However, Oman does levy a corporate income tax on business profits.
Detailed Answer
Oman’s zero-rate personal income tax policy is consistent with the broader Gulf Cooperation Council approach, where member states have historically relied on hydrocarbon revenues rather than direct taxation of individuals to fund government expenditure. This policy serves as an incentive for attracting skilled expatriate workers and foreign entrepreneurs.
Corporate taxation is a different matter. Oman imposes a flat corporate income tax rate of fifteen percent on taxable profits earned by both Omani and foreign companies operating in the Sultanate. This rate was increased from twelve percent in 2017 as part of fiscal consolidation measures. Small and medium enterprises meeting certain criteria may qualify for reduced rates or exemptions.
Companies operating within designated free zones and special economic zones may be eligible for corporate tax holidays, typically lasting between five and thirty years depending on the zone and the nature of the investment. Withholding tax of ten percent applies to certain cross-border payments including royalties, management fees, and dividends paid to non-residents.
While personal income tax remains absent, Oman introduced value-added tax in April 2021, adding an indirect tax component to the fiscal system. Discussions about potentially introducing personal income tax have surfaced periodically but no legislation has been enacted.