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Tax rates in Oman

Tax Rates

Consumption Taxes

Nature of the Tax
Oman recently introduced a value-added tax (VAT), along with other Gulf Cooperation Council (GCC) member countries. The implementation date was April 2021.
Tax Rate
5%
Reduced Tax Rate
Zero-rated items include exports of goods and services; supply of certain basic foodstuff; supply of medicine and medical equipment; supply of investment gold, silver and platinum; supply of international transport of goods and passengers and related services; supply of sea, air and land means of transport for transport of goods and passengers for commercial purposes, and related goods and services; supply of rescue aircraft, rescue boats and auxiliary ships; and supply of crude oil and its oil derivatives and natural gas.

The categories of exempt supplies of goods and services are financial services; provision of healthcare and associated goods and services; provision of education and associated goods and services; supply of local passenger transport; supply of bare land; resale of residential real estate; the renting of real estate for residential purposes.

Other Consumption Taxes
Starting from June 2019, Oman levies excise duties on tobacco products, alcoholic beverages, and energy drinks (at 100%) as well as on carbonated drinks (50%).

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Corporate Taxes

Company Tax
15%
Tax Rate For Foreign Companies
Omani companies are taxed on their worldwide income, with a foreign tax credit granted for certain taxes paid overseas. Foreign companies are taxed on their Oman-source income.
Branches of foreign entities are taxed at 15%.
Capital Gains Taxation
Capital gains are taxed at the same rate as ordinary income. Gains from the sale of locally listed shares are exempt from tax.
Main Allowable Deductions and Tax Credits
Depreciation is provided on a straight-line basis on a wide range of assets at rates varying between 4% and 100%. A "pooling" concept is allowed, whereby assets subject to the same rate of depreciation may be pooled together for purposes of depreciation. Goodwill is also amortizable for tax purposes.
Start-up expenses are allowed as a deduction in the first taxable year. Interest expense is allowed for loans from unrelated parties or on loans from banks, as well as on expenses incurred for the purpose of earning income.
Charitable contributions are deductible up to 5% of gross income. Bad debts can be deducted at the time of write-off.
All expenses incurred for the generation of gross total income are allowed, including entertainment costs (without any limits). Social security contributions are also deductible.
Sponsorship fees paid to Omani sponsors are restricted to 5% of net taxable income before sponsorship fees. Net taxable income is determined after offsetting any losses carried forward. Charges or expenses allocated from the head office or other group companies are limited to 3% of gross income (5% for banks and insurance companies, and 10% for high-tech industrial activities). Commissions paid by insurance companies are restricted to 25% of net premiums collected.
Fines, penalties and taxes are not tax-deductible.
Net operating losses can be carried forward and set off against taxable income for five years. Carryback of losses is not permitted.
Other Corporate Taxes
The total monthly social security and insurance contributions to be made by the employer equal to 11.5% of the salary (10.5% social security, 1% insurance for work-related injuries). This contribution system applies only to Omani citizens and other employees from the Gulf Cooperation Council area. Furthermore, from January 2021, employers and Omani employees are each required to make a monthly salary contribution at the rate of OMR 1 per OMR 100 of monthly salary (or 1% of payment) as part of the job security scheme.
Municipal taxes apply to various services at the following rates: 3% on property rents, 5% on hotel occupancy, 10% on leisure and cinema houses.
Stamp duty of 3% is applicable to the transfer of land and property.
Other Domestic Resources
Tax Authority
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Oman Middle East & North Africa United States Germany
Number of Payments of Taxes per Year 15.0 20.8 10.6 9.0
Time Taken For Administrative Formalities (Hours) 68.0 204.0 175.0 218.0
Total Share of Taxes (% of Profit) 27.4 32.1 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

No Individual Tax
Allowable Deductions and Tax Credits
Non applicable - There is no individual income tax in Oman.
Special Expatriate Tax Regime
Non applicable - There is no individual income tax in Oman.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
List of double tax agreements signed by the Sultanate of Oman
Withholding Taxes
Dividends: 0%, Interests: 0%, Royalties: 0% (residents)/10% (non-residents)
Bilateral Agreement
The United Kingdom and Oman are bound by a double taxation treaty.

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Latest Update: July 2022

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