01
Income tax: base rate 15%
The official tax portal specifies 15% of net taxable income for institutions and commercial companies. This is not a turnover tax: the accounting result is adjusted under the Income Tax Law, and any relief or exemption must have a specific legal basis.
- Taxpayer
- Omani companies and other persons within the scope of the law
- Rate
- 15% of net taxable income
- Oil & gas exploration
- 55% under concession contracts and applicable rules
- Evidence
- Accounting records, invoices, contracts, bank documents and tax-adjustment calculations
02
From accounting profit to tax base
The expense must be related to the generation of income, documented and not subject to restrictions. Depreciation, reserves, remuneration to related parties, interest, fines, entertainment expenses and owner transactions are checked separately.
Sales, services, investment and other income according to the applicable rule.
Business purpose, document, period and absence of special prohibition.
Arm's-length terms, price calculation and supporting materials.
Origin, transfer and use are subject to the applicable conditions.
03
The 3% rate requires checking the conditions
The official portal indicates 3% for small businesses subject to special criteria, including revenue and headcount indicators. It cannot be used merely because a company is new or has a small turnover.
Before calculation, record the legal form, ownership, revenue, employees, activity and all other criteria in the applicable provisions.
04
VAT: standard rate of 5%
The standard VAT rate is 5% for most goods and services, including imports. The law provides for zero-rated and exempt supplies. For exports, international transport, financial services and real estate, treatment depends on the applicable conditions and evidence.
- Standard rate
- 5%
- Zero-rated
- Including eligible exports and international transport
- Exempt
- Certain financial services and residential real estate transactions
- Input VAT
- Deduction depends on use in taxable activities and supporting documents
- Registration
- Mandatory or voluntary, according to the prescribed thresholds and rules
05
Withholding tax on payments to non-residents
The official portal describes withholding 10% of the gross amount from certain payments to a non-resident without a permanent establishment in Oman, including royalties, R&D, software, management fees, dividends, interest and services. The payer must remit the tax by the 14th day following the end of the month of payment or accrual.
- Rate
- 10% of the gross amount, if the payment falls within the applicable scope
- Trigger
- Payment or crediting, under the applicable rule
- Deadline
- By the 14th day of the following month
- Treaty
- Check the treaty, tax residence and eligibility for a reduced rate
- File
- Contract, invoice, tax residence certificate and tax-treatment analysis
Scope and reliefs may change through legislative or administrative decisions. Before payment, check the current law, applicable treaty and actual nature of the service.
06
Cross-border group transactions
The contractual label of a payment does not determine its tax treatment. Management fees, royalties, loan interest, cloud or software charges, service bundles and reimbursements are analysed by function, place of performance, IP rights and evidence.
- Permanent establishment
- People, place, agent, project and duration
- Transfer pricing
- Functions, assets, risks and arm's-length pricing
- Treaty access
- Tax residence, beneficial ownership and special restrictions
- Foreign tax
- Availability of a credit and evidence of payment
- VAT
- Reverse charge or imported-service treatment under the applicable rules
07
Zone incentives do not arise automatically
OPAZ describes tax exemptions of up to 30 years, but the precise period, exclusions, application process and ongoing conditions depend on the zone and applicable instrument. For VAT, Duqm, Salalah, Sohar and Al Mazunah are classified as Special Zones; the zero rate applies to qualifying supplies only if the conditions of the implementing rules are met.
08
Tax compliance calendar
The company must establish accounting, document and deadline controls from its first day. Filing deadlines depend on the tax and reporting period; the entity's calendar should be confirmed through the Tax Authority portal.
- Income tax
- Registration, tax-base calculation, return and payment
- VAT
- Registration, tax invoices, returns, payment and reconciliation
- WHT
- Review of each non-resident payment and the monthly deadline
- Records
- Contracts, invoices, customs, bank and reconciliation records for the retention period
- Changes
- Activities, address, ownership and deregistration
09
CFO checklist
- 01
Determine taxpayer, permanent establishment and tax status of each company.
- 02
Set up chart of accounts and tax adjustments.
- 03
Separate 5%, 0%, exempt and out-of-scope VAT transactions.
- 04
Embed WHT-review before paying to a non-resident.
- 05
Collect a calendar of declarations, payments and renewals.