Only Commercial Companies are liable to pay income tax in Oman. There is no personal income tax, fringe benefits tax, gift tax, wealth tax or any form of estate duty, and there is no sales tax or value-added tax. Under the Oman Income Tax Law, Oman has adopted a global tax system whereby a company in Oman is taxed on its entire income, wherever earned in the world, subject to provisions in Oman tax law and Double tax treaties to avoid International double taxation. The Executive Regulation to the Oman Tax Law provides the detailed rules which apply to the tax treatment of certain income and expense items, thin capitalization rules and specific forms to be completed for tax purposes.
Corporate Tax Rates
Under the Income Tax Law of Oman, income-tax rate applicable to any business establishment, Omani company or Permanent Establishment (i.e. foreign branch), for any tax year would @15% on the taxable/assessed income.
In the case of small enterprises engaged in permitted activities, tax will be levied @ 3% on the taxable income on the satisfaction of all the following criteria;
- Registered Capital not more than RO.50,000,
- Gross annual Income not exceeding RO.100,000, &
- Average number of employees not exceeding 15
As per the Income Tax Law of Oman, tax shall be charged on the following types of income accruing or arising in Oman:
- Consideration for research and development
- Consideration for the use of or right to use computer software
- Fees for management or performance of services
- Dividend on shares or interest.
The tax mentioned above shall be charged at the rate of 10% of the gross amount of the aforementioned types of income paid or credited to the account of any foreign person that does not carry on any business in Oman through a permanent establishment situated therein or that such person carries on business in Oman through a permanent establishment but the payment does not constitute a part of the gross income of that permanent establishment. Any taxpayer that has paid or credited any of the amounts as specified above shall be liable to deduct tax from the gross amount paid or credited and remit the same to the Tax Authority not later than 14 days from the end of the month in which the amount is paid or credited, whichever is earlier.