01
Legal issue
Revenue of a foreign branch from legal practice and consultancy was treated as taxable professional income, including fees of engaged professionals in the circumstances of the case.
02
Published principle
The Arabic text published by the Supreme Court is the primary source. The English translation was published by the Technical Bureau; Russian and Chinese are unofficial Smart Global Capital editorial translations.
This is a published legal principle—an extract selected by the Supreme Court of Oman Technical Bureau—not the full text of the judgment.
If a law firm operates as a branch of a foreign company engaged in legal practice and consultancy services in the Sultanate of Oman, both locally and internationally, the revenue generated from such activities shall be considered professional income subject to taxation. Consequently, the work performed by lawyers and consultants, whether they are affiliated with the firm, contracted with it, or non-residents in the Sultanate, shall fall within the scope of professional activities as defined under Articles 28 and 29 of the Income Tax Law promulgated by Royal Decree No. 28/2009, as well as Article 6 of the Executive Regulations thereof. Accordingly, the fees they receive are derived from professional activities and are therefore taxable. Under no circumstances can these fees be considered as deductible expenses.
03
Applicability
The conclusion is fact-specific and applies the tax provisions then before the Court. Later amendments, income characterisation, permanent-establishment and withholding rules, and deductibility requirements must be checked; the headnote is not a general prohibition on all deductions.
04
Related instruments
- Income Tax Law, Royal Decree No. 28/2009
- Income Tax Law Executive Regulations, Article 6
05