Overview
The reform of Oman’s corporate income tax regime in 2023 modernised the business taxation framework, introducing a revised rate structure, updated incentives, and alignment with international tax standards including OECD guidelines on base erosion and profit shifting. The reform balanced the need for increased non-oil revenue with the imperative to maintain a competitive business environment. Careful design ensured that the tax system supports rather than hinders private-sector investment and economic diversification.
Key Points
The reformed tax applies a flat rate to taxable corporate profits above a specified threshold, with a lower rate or exemption for qualifying small and medium enterprises. Transfer pricing rules based on the arm’s length principle prevent profit shifting to low-tax jurisdictions. Tax incentives are targeted at priority sectors including manufacturing, technology, and renewable energy. Country-by-country reporting requirements apply to large multinational enterprises. The tax administration has been digitised with online filing, assessment, and payment systems.
Current Status
The first full year of the reformed regime has shown strong compliance and revenue generation. The Tax Authority has issued comprehensive guidelines and conducted outreach sessions for the business community. International tax advisors have noted the alignment with global standards as positive for foreign investor confidence. The government monitors the effective tax burden to ensure it remains competitive with regional peers while meeting revenue objectives.
Vision 2040 Context
Corporate tax reform supports Vision 2040’s dual objectives of fiscal sustainability and economic competitiveness. A transparent, internationally aligned tax system attracts quality foreign investment and encourages domestic enterprise. Revenue from corporate taxation contributes to the diversified fiscal base that enables sustained public investment in the human and physical capital that drive long-term economic growth.