Oman Tax FAQ

Does Oman have personal income tax?

No, Oman does not impose personal income tax on individuals. This applies to both Omani nationals and expatriate residents. Salary income, investment income, and capital gains earned by individuals are not subject to income tax.

What is the corporate tax rate?

The standard corporate income tax rate is 15 percent on taxable income exceeding OMR 30,000 per year. The first OMR 30,000 of taxable income is exempt. This rate applies to all businesses operating in Oman outside of free zones.

How does VAT work in Oman?

Oman introduced a 5 percent value-added tax in April 2021. VAT applies to most goods and services with specific exemptions and zero-rated categories. Businesses must register if annual turnover exceeds OMR 38,500 and may voluntarily register if turnover exceeds OMR 19,250.

What goods and services are VAT exempt?

VAT exemptions apply to financial services, residential property rentals, and bare land sales. Zero-rated items include basic food items (91 categories), healthcare services, education, international transport, and exports. Businesses supplying zero-rated goods can reclaim input VAT.

Are there withholding taxes?

Yes, a 10 percent withholding tax applies to payments made to non-resident companies for royalties, management fees, and certain service fees. The rate may be reduced under applicable double taxation treaties. Dividend and interest payments are not subject to withholding tax.

What tax incentives exist for free zone businesses?

Free zone businesses enjoy corporate tax exemptions for periods ranging from 10 to 30 years, depending on the zone. Customs duty exemptions apply to imports and re-exports. These incentives are contractually guaranteed and renewable upon expiry.

Does Oman have double taxation treaties?

Yes, Oman has signed double taxation avoidance agreements with over 35 countries including the UK, India, France, South Korea, China, and most GCC states. These treaties prevent double taxation and may reduce withholding tax rates on cross-border payments.

How is the tax year defined?

The standard tax year follows the calendar year (January to December). Companies may apply for a different fiscal year with approval from the Tax Authority. Tax returns must be filed within four months of the fiscal year end.

What is the transfer pricing regime?

Oman has introduced transfer pricing regulations requiring related-party transactions to be conducted at arm’s length. Companies must maintain transfer pricing documentation and file country-by-country reports if part of a multinational group exceeding specified revenue thresholds.

Is there excise tax?

Yes, excise tax applies to tobacco products (100 percent), energy drinks (100 percent), carbonated drinks (50 percent), alcohol (100 percent), and pork products (100 percent). The excise tax is levied at the point of import or production.