The ordinary business tax framework

Oman’s ordinary business income tax is not a general tax holiday attached to a residence visa. The standard rate is 15% of net taxable income. Eligible small enterprises can use 3% under specific statutory conditions, and petroleum exploration has a 55% regime connected with concession arrangements. The taxpayer and activity determine which rules apply.

An Omani company, an establishment and a foreign permanent establishment require their own analysis. Foreign ownership, commercial licensing, sector approvals and Omanisation duties are distinct from the tax rate. Start with the business model and functions rather than choosing a company based on a headline percentage.

IssuePractical meaning
Ordinary taxable business15% of net taxable income.
Qualifying small enterprise3% only where the statutory eligibility conditions are met; not every small foreign-owned company qualifies.
Petroleum exploration55% under the special concession/statutory framework.
References [1][2]

Worldwide income and company residence

An Omani company’s taxable business income is generally assessed on a worldwide basis. Article 18bis(2) defines corporate tax residence through incorporation in Oman or principal/actual management headquarters there. For a foreign company, separately determine taxpayer status, any permanent establishment and the income within the charging provisions; foreign incorporation alone does not resolve these questions.

The OECD’s primary review records a practical distinction for foreign companies seeking an Oman residence certificate: the authority expects proof of main or effective headquarters and registration as a taxpayer, including acceptance of worldwide taxation. A fixed place of business or management can also be relevant to a foreign permanent establishment. These issues need a facts-and-treaty review.

References [2][3][4]

Income, gains and accounting records

A business should maintain accounts that distinguish trading receipts, financing, asset disposals, related-party dealings and non-business amounts. The absence of current general personal salary tax does not exempt a company’s gain or operating profit. Deductions and capital allowances require the applicable statutory treatment and supporting records.

Keep acquisition invoices, improvement costs, depreciation and disposal documentation. A personal move to Oman does not establish a universal new market-value cost for a business asset. Asset transfers into a company, business acquisitions and reorganisations need their own valuation and tax review.

References [2][5]

Cross-border payments and withholding

The ordinary statutory withholding rate is 10% for specified payments to a nonresident without the relevant Oman permanent-establishment connection. The authority lists categories including royalties, research and development, software, management and services, with treaty and payment-character qualifications.

The 2023 royal directives announced cessation of withholding on dividends and income from bonds and sukuk for foreign investors. That investment-income announcement must be read alongside the authority’s broader category list. It should not be used to label every service invoice, royalty or private financing payment as exempt. Before payment, verify the category, recipient, applicable suspension or exemption and treaty procedure.

IssuePractical meaning
Specified services / royalties / management and similar categoriesOrdinary 10% withholding, subject to statutory scope and treaty relief.
Dividends and announced bond/sukuk investment incomeReview the 2023 suspension and the exact instrument; do not blindly copy an old 10% dividend table.
Payer workflowIdentify recipient, contract, residence evidence, withholding decision and remittance deadline before transferring funds.
References [6][7][1]

VAT registration and place of supply

The standard VAT rate is 5%, with zero-rating and exemptions for specified transactions. Registration thresholds are based on the relevant taxable supplies, not simply accounting profit. The published mandatory threshold is OMR 38,500 and the voluntary threshold OMR 19,250.

Cross-border services, imported goods and special-zone transactions need their own place-of-supply, import and input-tax analysis. A customer abroad does not automatically prove that an invoice is outside VAT. Build invoicing and evidence requirements into the operating process from the first transaction.

References [1][5]

Large-group minimum taxation

Royal Decree 70/2024 introduced the supplementary minimum-tax framework, including domestic minimum top-up tax and an income inclusion rule from 2025. This is a separate large-multinational-group calculation; it is not a replacement label for the ordinary 15% income tax.

An in-scope group should review consolidated revenue, entity location, effective-rate adjustments and the applicable implementation rules. A special-zone incentive or other exemption does not by itself establish that the group owes no top-up tax.

References [8]

Employer contributions changed during 2026

Build payroll by nationality, worker category and effective date. Omani pension, employment security and the employer-funded branches should not be combined under one assumed ceiling. Non-Omani maternity and the sick/other-leave branch also create employer costs; the latter’s compulsory scope in the 2026 decision starts on 19 July.

Work-injury and provident phases for non-Omanis must follow the amended commencement provisions and actual implementing decisions. Do not treat a future 9% savings contribution or injury branch as a current universal levy without confirming that it has started for the employee concerned. Budget other labour and immigration costs separately.

References [9][10][11][12]

Registration, ownership and compliance

The authority requires income-tax registration for an establishment engaged in economic activity within no more than 60 days of starting the activity or registering with the commerce ministry. A commercial registration does not automatically complete tax registration. Annual returns, payment and record retention follow.

Connect the legal ownership register, beneficial owners, authorised signatories, bank file and actual activities. Keep related-party contracts and management records consistent with how the business works. The current professional tax summary reports no general CFC regime, while the separate large-group minimum-tax rules still require review. A comprehensive corporate exit-tax determination remains unverified; an asset transfer or business relocation needs its own assessment.

References [5][2][13][14][8]
Sources & research notes14 references

Sources supporting this guide. Research draft awaiting editorial review.

  1. Oman Tax Authority — tax rates
  2. OECD Global Forum — Oman 2025 peer review
  3. Oman Tax Authority submission to OECD — tax residence
  4. Oman Ministry of Justice and Legal Affairs — Income Tax Law, Arabic consolidation, Article 18bis(2)
  5. Oman Tax Authority — registration
  6. Oman Tax Authority — withholding tax
  7. Financial Services Authority — royal directives on dividend and bond/sukuk income withholding
  8. Central Bank of Oman — Annual Report 2024, tax measures box
  9. Social Protection Fund — Social Protection Law 52/2023, English
  10. Royal Decree 60/2025 — amended social-protection commencement
  11. SPF Decision R/13/2026 — non-Omani sick and other leave coverage
  12. Social Protection Fund — maternity-leave insurance
  13. Bank Muscat — business account opening form
  14. PwC Worldwide Tax Summaries — Oman: group taxation (professional summary)