The Income Tax Law aims to tax the worldwide income of companies based in Oman as well as the income that comes from Oman for branches and other types of permanent establishments.
The rate of income tax is the same for all business entities, whether they are registered or not and whether they are corporations or not.
All taxpayers except Omani proprietorships (called “establishments”) and limited liability companies (LLCs) that meet the criteria for small and medium enterprises pay 15% income tax.
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Omani proprietorships (called “establishments”) and LLCs that meet the requirements below:
- Capital on file can’t be more than 50,000 Omani rial (OMR) at the start of the tax year.
- Gross income can’t be more than 100,000 OMR for any tax year.
- During the fiscal year, the average number of employees does not exceed 15.
- Taxpayer activities do not include air or sea transport, the extraction of natural resources, banking, insurance, or financial services, public utility concessions, or other activities to be decided by the Minister of Finance after approval by the Council of Ministers.
A 3% tax rate is in effect, and SME taxpayers are required to file income tax returns.
Petroleum income tax
When it comes to taxes, money made from selling petroleum is taxed in a special way. The tax rate for these kinds of businesses is set at 55%. The tax rates, on the other hand, depend on the individual Exploration and Production Sharing Agreement made between the government of Oman and the company selling petroleum. Under these agreements, the government pays the company’s share of income tax with money that is taken from the government’s share of production. So, the company doesn’t really have to pay the income tax.
Keep reading: Tax Professionals Guide to Relocating to Oman
Local income taxes
In Oman, there are no income taxes at the state or local level.