Tax laws Oman
Oman's taxation system is primarily corporate-focused, as the country does not impose personal income taxes. The tax framework has undergone significant updates to align with international standards, particularly concerning multinational enterprises.
1. Corporate Income Tax:
Standard Rate: The corporate tax rate is set at 15% for all businesses, including branches and permanent establishments (PEs) of foreign companies.
Small and Medium Enterprises (SMEs): Omani proprietorships and limited liability companies (LLCs) that meet specific criteria—such as having a registered capital not exceeding OMR 50,000, gross income not exceeding OMR 100,000, and an average of 15 or fewer employees—are eligible for a reduced tax rate of 3%.
Petroleum Sector: Income derived from the sale of petroleum is subject to a special tax rate of 55%.
2. Recent Developments:
- Supplementary Tax Law: In December 2024, Oman introduced Royal Decree No. 70/2024, implementing supplementary taxes on multinational enterprises. This law introduces a Domestic Minimum Top-Up Tax and an Income Inclusion Rule, aiming to ensure that multinational entities pay a global minimum tax of 15% on their profits.
3. Withholding Tax (WHT):
- General Rate: A withholding tax of 10% applies to payments such as royalties, fees for management, dividends, interest, and fees for services made to foreign entities without a permanent establishment in Oman.
4. Personal Income Tax:
- Absence of Personal Income Tax: Oman does not currently impose a personal income tax. However, there have been discussions about introducing a flat tax rate ranging from 5% to 9% on net global income exceeding certain thresholds for both Omani citizens and expatriates.
5. Tax Compliance:
- Reporting Requirements: Businesses are required to file provisional tax returns within three months of the end of their financial year and submit annual tax returns within six months, accompanied by audited financial statements. Failure to comply with these deadlines may result in penalties of up to OMR 2,000.
6. Legal Publications:
- Official Gazette: Oman's Official Gazette publishes laws, royal decrees, treaties, and other legal documents. While it is primarily in Arabic, indexes are available online.
Note: Tax laws and regulations are subject to change. It is advisable to consult with tax professionals or the Omani Tax Authority for the most current information.
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