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com/oman/Corporate
Worldwide Tax Summaries

Oman
Last reviewed - 28 February 2023

Corporate - Significant developments

Oman recently introduced country-by-country (CbC) reporting requirements applicable for reporting years beginning on or after 1 January 2020.
Further, please note that although the Oman Tax Authority announced the suspension of 'local filing' requirements for multinational groups
headquartered outside Oman till further notice, however other obligations (i.e. CbC notification requirements) will continue to apply.

Oman became the 91st country to sign the Organisation for Economic Co-operation and Development's (OECD's) Multilateral Convention to
implement Tax Treaty related measures to prevent base erosion and profit shifting (BEPS) (i.e. the MLI). Oman has ratified the MLI and the MLI
has entered into force from 1 November 2020.

The Central Bank of Oman implemented the Common Reporting Standards (CRS) regime in Oman, setting out rules for automatic exchange of
information through the CRS.

As part of reform initiatives of the government, in October 2019, a new autonomous Tax Authority (TA) was established, marking a significant step
towards evolving the tax function in the country.

A value-added tax (VAT) has been implemented in Oman from 16 April 2021.

In October 2021, the TA issued “Guidelines on the Mutual Agreement Procedure (MAP) Assistance in Oman”.

These guidelines clarify that “Under Oman domestic legislation, there is no suspension of tax collection during the MAP process. However, tax
collection may be suspended where, separately, the taxpayer has appealed against an assessment and has paid the undisputed amount of tax.
Where applicable, interest and penalties will apply in accordance with the Income Tax Law.”

A Double Taxation Avoidance Agreement (“DTAA”) between Oman and Qatar has been signed on 22 November 2021, which has been ratified by
Oman in January 2022. The DTT was ratified in Qatar as well through Emiri Decree No. 45 of 2022, which was published in the official gazette on
9 November 2022. The DTT has entered into force from 2023.

The Oman Tax Authority announced that companies in certain sectors who started operations during the period from 1 January 2021 to 30
December 2022 are to be exempt from Corporate Income Tax. These include companies operating in the industry, tourism, logistics, fisheries
agriculture wealth and mining. The exemption will be valid for a period of 5 years from the date of operation or commencement of production and
there are certain rules and conditions that the companies must abide with in order to receive this exemption.

The Oman Tax Authority also announced suspension of withholding tax which was imposed on the lease of ships, aircraft and aircraft engines,
effective from 29 December 2022.

The Oman Tax Authority has announced a phased implementation of the digital tax stamp scheme for excise products.The scheme will be
applied at the beginning of the project on imported cigarettes and then it will be extended to all excise goods in the Sultanate of Oman,
according to timetables that will be announced by the Oman Tax Authority (with an aim to apply the scheme to all excise goods from the
beginning of 2023).

While dividends and interest were initially included in the list of payments made to foreign entities that attract withholding tax, a Royal Directive
issued by His Majesty Sultan Haitham bin Tarik on the occasion of Accession Day in 2023 called for the complete suspension of withholding tax
on the distribution of dividends and interest on non-resident investors.

Economic Stimulus Plan (Oman Vision 2040)

As part of Oman’s Vision 2040 and a plan to diversify the economy away from oil, His Majesty Sultan Haitham Bin Tarik approved tax incentives
for companies as part of an economic stimulus plan to enhance growth rates. As per the International Monetary Fund (IMF), Oman’s economy
suffered a 6.4% shrinkage in 2020 after being hit heavily by the COVID-19 pandemic and dipping oil prices. Construction, hospitality, wholesale,
and retail sectors were particularly affected.

Measures include the following:

Companies that begin operating during the period January 2021 to December 2022 in sectors aimed at economic diversification will be
exempt from income taxes.

Hotel establishments will be exempt from income tax due for tax years 2020 and 2021.

Taxpayers are allowed to settle income tax amounts falling due during the year 2021 in instalments without application of delay fines on the
amounts (instalments) paid beyond the statutory due dates.
 Taxpayers that file corporate income tax returns and settle income tax amounts within the prescribed statutory due date are eligible for (i) a
reduced tax rate of 12% and (ii) a 1% rebate on tax liability.
Tax losses declared by Omani companies (not including permanent establishments) for tax year 2020 can be carried forward for set off
against future taxable income indefinitely (i.e. without being restricted to the five years carry forward limit).
See the Tax administration section for a description of tax measures announced in response to COVID-19.

Corporate - Taxes on corporate income

The Income Tax Law seeks to tax worldwide income of entities formed in Oman and the Oman-source income of branches and other forms of
permanent establishment (PE).

The rate of income tax is uniform for all types of business entities, regardless of whether it is a corporate entity and/or whether it is registered or
not.

The income tax rate is 15% for all taxpayers other than Omani proprietorships (‘establishments’) and limited liability companies (LLCs) that fulfil
the conditions of small and medium enterprises (SMEs).

For Omani proprietorships (‘establishments’) and LLCs that meet the following requirements:

registered capital does not exceed 50,000 Omani rial (OMR) at the beginning of the tax year

gross income does not exceed OMR 100,000 for any tax year

average number of employees during the tax year does not exceed 15, and

taxpayer activities do not include air/sea transport; 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 effective and is coupled with a requirement for SME taxpayers to file income tax returns.

Petroleum income tax

Special provisions are applicable to the taxation of income derived from the sale of petroleum. The tax rate specified for such companies is 55%.
However, the tax rates are applied on income as determined by the individual Exploration and Production Sharing Agreement entered into
between the government of Oman and the company engaged in the sale of petroleum. Under these agreements, the government pays the
company’s share of income tax from amounts withheld from the government’s share of production. Consequently, the income tax is not actually
borne by the company.

Local income taxes

There are no regional or local income taxes in Oman.

Corporate - Corporate residence

The term ‘resident’ is not defined in the tax law.

However, tax residency has been defined in the context of withholding tax (WHT) provisions as:

A natural person who is present for a continuous or intermittent period of not less than 183 days in a year.

A legal person established in Oman / with main or actual headquarters located in Oman.

Permanent establishment (PE)

PE is defined in very broad terms and includes places of sale, places of management, branches, offices, factories, workshops, mines, quarries,
other places of extraction of natural resources, and a building site, place of construction, or assembly project (if it continues for more than 90
days). However, the mere use of storage or display facilities does not constitute a PE. The definition of PE references carrying on business in
Oman, either directly or through a dependent agent.

Additionally, the definition stipulates that a total stay of 90 days during a 12-month period creates a PE in Oman. However, this 90-day period
applies to rendering of consultancy services or other services only. Under this definition, while the sale of goods into Oman will not be deemed to
be a taxable activity, a contract for the supply and installation of equipment is likely to attract tax. By the same criterion, services rendered by
personnel visiting Oman will be treated as taxable activities, applying the 90-day rule.

Corporate - Other taxes

Value-added tax (VAT)
On 12 October 2020, His Majesty issued Royal Decree no. 121/2020 in relation to the implementation of VAT in Oman, and it was published in
the Official Gazette on 18 October 2020. VAT has been implemented in Oman with effect from 16 April 2021. The standard rate of VAT in Oman is
5% and consistent with the GCC Unified Agreement, and there are provisions for zero rating and exemptions in the Oman VAT Law. By global
standards, 5% is one of the lowest VAT rates implemented in the world.

VAT rate
The standard rate of 5% VAT will apply on goods and services supplied in Oman, subject to specific exemptions and zero ratings prescribed
under Oman VAT law.

Exempt supplies are not subject to VAT, and the input tax in relation to exempt supplies cannot be recovered. Examples of exempt supplies
include certain financial services, local passenger transportation services, education services, renting of residential property etc.

Zero-rated supplies are subject to VAT at 0%, and the supplier can avail input VAT credit in respect of goods / services used for making zero
rated supplies. Examples of zero-rated supplies include export of goods and services outside Oman, international transportation services, basic
food items etc.

VAT registration
Registration for VAT is an online process.

There is a mandatory registration requirement if the total value of annual supplies exceeds or is expected to exceed OMR 38,500. There is a
voluntary registration threshold if the total value of annual supplies / expenditure exceeds or is expected to exceed OMR 19,250.

VAT return
Taxpayers are required to file a VAT return and make payment of VAT liability on a quarterly basis. The due date for filing of VAT return and
making payment of VAT liability is 30 days from the end of the quarter.

If the due date falls on a weekend or a public holiday, the due date for filing of VAT return and making payment of VAT will be extended to the
next working day.

The late payment of VAT liability is subject to additional tax at 1% per month or part thereof whereas a delayed filing of VAT return is subject to
administrative penalty ranging from OMR 500 to OMR 5,000.

The Oman Tax Authority has released VAT guides for certain industries such as Financial Services, Oil & Gas, Education Services, Transportation
Services, Real Estate etc. to provide further guidance in terms of industry specific VAT implications. Also, further VAT guides are expected to be
issued in the near future.

Statute of Limitations
The taxpayers are required to file a VAT return on a quarterly basis based on self assessment of their inward and outward supplies during a tax
period. As per the Oman VAT law, the Oman Tax Authority can not assess the Tax after completion of 5 years from the due date of a tax period
(due date is 30 days from the end of tax period). The period will be extended to 10 years in cases where registration is not made within the
prescribed time limits.

VAT record maintenance

VAT records are required to be maintained for a period of 10 years by the businesses. However, the businesses in the real estate sector are
required to maintain records for up to 15 years. VAT records mainly include sales and purchase invoices, accounting records, customs
documents, inventory records etc.

A taxpayer is allowed to maintain electronic records subject to conditions prescribed under the Oman VAT Executive Regulations.

A taxpayer may keep accounting records, books, invoices and other documents / records in any language, provided that they are made available
in Arabic language, upon the request of the Oman Tax Authority.

Customs duty
Customs duty is applicable on the CIF value of imports for most non-GCC sourced goods, unless there is any preferential treatment under the
Free Trade Agreement (FTA) signed between Oman and a foreign country.

Standard rate of Customs duty is 5%. However, there are certain goods which are subject to Customs duty at different rates.

Authorized Economic Operator (AEO) Program

The AEO program provides traders with the opportunity to partner with the customs authorities and secure benefits within their supply chain. All
businesses operating in Oman can apply and benefit from the AEO program, subject to the fulfilment of the required criteria. Benefits of obtaining
AEO certification include simplified verification of documents during customs clearance, exports and imports pass through express lines, priority in
inspections and faster cargo clearance process, etc.

We encourage businesses engaged in import and export activities in Oman to explore the advantages of joining the AEO partnership program. This
is a fantastic opportunity to ensure compliance with customs regulations, while benefiting from a strong governance of your international supply
chain operations across your business.
Excise taxes
Oman introduced excise tax with effect from 15 June 2019. Excise tax is levied at the following rates:

Tobacco (including tobacco derivatives), pork products, alcoholic beverages, and energy drinks: 100%.

Sugar sweetened beverages: 50% (effective from 1 October 2020)

Carbonated drinks: 50%.

Digital tax stamp scheme for Excise products

The Oman Tax Authority has announced a phased implementation of the digital tax stamp scheme for excise products.The scheme will be applied
at the beginning of the project on imported cigarettes and then it will be extended to all excise goods in the Sultanate of Oman, according to
timetables that will be announced by the Oman Tax Authority (with an aim to apply the scheme to all excise goods from the beginning of 2023).

The key dates for application of the digital tax stamp scheme for cigarettes are mentioned below:

1. 30 June 2022 - With effect from such date, local importers can request tax stamps for their manufacturers to place them on cigarette packs.

2. 14 October 2022 - With effect from such date, it is unallowable to import any cigarette products that do not carry the digital tax stamp to the
Sultanate of Oman.

3. 1 February 2023 - It will be unallowable to sell, trade, import or produce any cigarettes in the Sultanate of Oman unless it holds the digital tax
stamp.

Property taxes
There are no property taxes in Oman.

Tourism tax
Restaurants/cafes located within a tourist area or managed through franchise agreements are required to levy tourism tax at 4%.

Stamp duty / Property transfer fees

Stamp duty is not applicable in Oman. However, a property transfer fee is applicable on transfer of land and property at 3% of the value to be
paid to the Ministry of Housing.

Environmental taxes
Oman does not levy any environmental or green taxes.

Payroll taxes
There are no payroll taxes in Oman other than social security contributions (see below).

Social security contributions

A 17.5% social security contribution is applicable to employees who are Omani nationals, but not to expatriate employees. The employee pays a
contribution of 7% of salary, and the employer pays the balance of 10.5%. The employer is also required to contribute for insurance for work-
related injuries in the amount of 1% of the salary of the employee. This brings the total monthly social security and insurance contributions to be
made by the employer to 11.5%.

From January 2021, employers and Omani employees are each required to make a monthly salary contribution at the rate of OMR 1 per OMR
100 of monthly salary (or 1% of payment) as part of the job security scheme implemented. This brings the total social security contribution to
20.5% of which the employee pays a contribution of 8% and the employer pays the balance of 12.5%

Municipal taxes
Municipal taxes apply to the following items:

Property rents: 3%.

Hotel occupancy: 5%.

Leisure and cinema houses: 10%.

As part of the Economic Stimulus Plan (ESP) announced in March 2021, the Government announced an exemption from collection of Municipal
Tax and Tourism Tax up to 31 December 2021. The said exemption has been withdrawn with effect from 1 January 2022 and as a result, a levy of
Municipal Tax and Tourism Tax has become effective from such date.

Corporate - Branch income

The tax rate for branches of foreign entities (regardless of country) is a flat 15%.

Expenses incurred by the head office that can be identified as directly related to the branch’s activity are deductible. The deduction for other
head office expenses is limited to 3% of the branch’s gross income for the year. This rate is 5% for banks and insurance companies, and 10% for
high-tech industrial activities.

Corporate - Income determination

Inventory valuation
Inventory should be valued using a method that complies with International Accounting Standards.

Capital gains
Gains on sales of securities listed on the Muscat Securities Market are exempt from taxation. Gains on transfers of other assets are taxable as
ordinary income.

Dividend income
Dividends received from Omani entities are exempt from taxation. Foreign-source dividends are taxable at the same rates as corporate income.

Stock dividends
There are no provisions in the tax law that address stock dividends.

Interest income
Interest income is taxable as business income.

Rent/royalty income
Rental income and royalties are taxed as business income.

Unrealised exchange gains/losses

Unrealised exchange gains are not taxable. Similarly, any unrealised loss is not deductible from the total taxable income.

Exempt income
The following income is exempt from income tax in Oman:

Dividends received from an Omani company.

Profits or gains on disposal of securities listed on Muscat Security Market.

Omani marine companies, whether wholly owned by Omanis or with foreign and Omani ownership and registered in Oman, are exempt
from tax. Foreign marine companies conducting activities in Oman through an authorised agent are exempted from tax with effect from the
date of commencement of activity, provided that reciprocal treatment is afforded by the country of the foreign company.
Income realised by foreign airlines carrying on business through PEs in Oman is exempt from tax. This exemption is limited to the extent of
the income from operating airplanes for international transport, provided reciprocal treatment is accorded in the airline’s home country.

Income realised by investment funds established in Oman under the Capital Market Authority Law or established overseas for dealing in
shares and securities listed on Muscat Security Market is exempt.

Foreign companies engaged in oil and gas exploration activities, while taxable under the law, normally have their tax obligations discharged
by the government under the terms of the Exploration and Production Sharing Agreement.

Foreign companies working for the government in projects deemed to be of national importance may be able to negotiate a tax protection
clause whereby any tax paid by them is reimbursed by the government.
See Exempt activities in the Tax credits and incentives section for a description of exemptions from tax for income from certain principal
activities.
Foreign income
Worldwide income of an entity formed in Oman is taxed in Oman. Credit for foreign taxes paid is given under the law; however, this may not
exceed the amount of Omani tax payable on such income.

The Oman tax law does not contain rules on deferral of foreign income.

Corporate - Deductions
Depreciation
Depreciation is taken on a straight-line basis on the following classes of assets at the annual rates shown.

Asset Rate (%)

Permanent buildings 4

Semi-permanent buildings 15

Docks, quays, jetties, sea barriers in ports, pipelines, roads, and railway lines 10

Aircraft and ships 15

Hospital buildings, educational establishments, and equipment for scientific research 100

The rate of depreciation allowed is doubled in the case of buildings used for industrial purposes.

The tax law also provides for calculation of depreciation on a net book value basis for the following classes of assets. A 'pooling' concept is
permitted, whereby assets subject to the same rate of depreciation may be pooled together for purposes of depreciation.

Pool Rate (%)

First pool is comprised of tractors, cranes, and other heavy machinery and equipment, including computer software installations, furniture
33.33
and fixtures, vehicles, computer software, and intellectual property (IP) rights

Second pool is comprised of drilling equipment 10

Third pool is comprised of 'other machinery and equipment' not included above 15

Goodwill
Goodwill is amortisable for tax purposes, generally over the life assigned for International Financial Reporting Standards (IFRS) accounting
purposes.

Start-up expenses
Expenses incurred before the commencement of business are allowed as a deduction in the first year of commencement of operations (or
period).

Interest expenses
Deduction of expenses incurred for the purpose of earning income is generally allowed. Interest expense is allowed for loans from unrelated
parties or on loans from banks. Interest paid to related parties is allowed only to the extent the loan terms are at arm's length and subject to
satisfaction of the 2:1 debt-to-equity ratio (see Thin capitalisation in the Group taxation section).

Bad debts and other contingencies

Amounts charged to the profit and loss account for creating provisions in respect of bad debts, stock obsolescence, warranties, and similar
types of contingencies are not tax deductible. Deduction is allowed only at the time of write-off or write back. However, provisions created by
licensed banks in respect of bad debts are allowable within the limits approved/required by the Central Bank of Oman.

Charitable contributions
Charitable donations (in cash or kind) are limited to specified institutions and organisations and are subject to an overall limitation of 5% of gross
income.
Meals, entertainment, officers’ compensation, etc.
All expenses incurred for the generation of gross total income are allowed. There are no specific restrictions on deduction for expenses like meals
and entertainment, compensation for officers, and life insurance payments for employees. There are limits on the deductibility of directors' fees.

Social security payments

Social security contributions paid by employers in respect of employees may also be deducted.

Pension payments
Contributions to pension funds, domestic and foreign, are deductible, provided the fund is licensed (in Oman or the country where it was
established) and complies with certain other specified conditions.

Illegal payments
Payments of bribes or kickbacks, and other illegal payments, are not deductible.

Fines and penalties

Civil fines and penalties are not deductible.

Taxes
Taxes on income, whether incurred in Oman or elsewhere, are not deductible in arriving at taxable income. A credit may be available for taxes
paid in a foreign jurisdiction.

Other significant items/restrictions on allowable expenses

The tax law has imposed restrictions on the deductibility of certain other expenses. The principal items affected are the following:

Sponsorship fees paid to Omani sponsors are restricted to 5% of net taxable income before sponsorship fees. Net taxable income is
determined after offsetting any losses carried forward.

Charges or expenses allocated from the head office or other group companies are limited to 3% of gross income (5% for banks and
insurance companies, and 10% for high-tech industrial activities).

Commissions paid by insurance companies are restricted to 25% of net premiums collected.

Leasing companies are treated at par with banks as far as deduction for loan loss provision is concerned. Leasing companies are allowed
deductions for loan loss provisions, subject to the limits or recommendations of the Central Bank of Oman.

Losses arising on sale of investments listed on the Muscat Security Market are not allowed as a deduction from taxable income.
Any expense or costs that have been incurred to generate income exempted from tax are not allowed as a deduction from taxable income.

Amounts paid as tax consultancy or advisory fees are disallowed.

For leases classified under IFRS 16, amortisation of right-of-use (ROU) assets and interest on lease liability are disallowed, with an
allowance for actual lease rental payments.

Net operating losses

Carryforward of losses is limited to five years, except in the case of companies that incurred losses during a mandatory tax-exempt period, where
the net losses may be carried forward indefinitely for offset against future profits.

Carryback of losses is not allowed.

Payments to foreign affiliates

Payments to foreign affiliates normally receive in-depth scrutiny from the tax authorities. Accordingly, proper documentation should be obtained
in order to establish that these transactions are made at an arm's-length basis.

Corporate - Group taxation

Businesses are taxed as separate entities, and the tax law does not recognise group taxation.
Transfer pricing
Transactions between related parties must be valued at arm’s length. There is no specific guidance on acceptable methods for determining an
arm’s-length price.

Inter-company payments
All inter-company payments are scrutinised in detail to ensure that the profits are not transferred to avoid payment of tax.

Thin capitalisation
If the debt-to-equity ratio exceeds 2:1 in the case of related-party debt, interest on the excess debt is not deductible for tax purposes. This rule
does not apply to banks and insurance companies, PEs of foreign companies, or proprietary (Omani owned) establishments.

Controlled foreign companies (CFCs)

There is no CFC regime in Oman.

Corporate - Tax credits and incentives

Foreign tax credit
A foreign tax credit is available to Omani companies or establishments (proprietorships) that suffer foreign taxes on income that is also taxed in
Oman. The credit is limited to the amount of tax incurred in Oman. The taxpayer is required to submit an application to the Tax Authority (TA) to
claim such credit.

Exempt activities
Effective for tax years beginning after 31 December 2016, tax exemptions are available only for industrial (manufacturing) activities. Exemptions
are no longer available for mining, export of locally manufactured goods, operation of hotels and tourist villages, agriculture, fishing, or education.

In addition, new industrial exemptions are limited to the initial five-year period, with no renewal.

Existing tax exemptions are not impacted, but the changes will look to impact pending renewal applications.

Further, companies registered with the Special Economic Zones and Freezones in Oman may be able to avail 25 to 30 years of tax exemptions,
subject to meeting certain conditions.

See Exempt income in the Income determination section for a description of other income items exempt from tax.

Corporate - Other issues

Mandatory disclosure rules
Currently, there are no mandatory disclosure rules applicable in Oman.

Corporate - Withholding taxes

Foreign companies that do not have a PE in Oman for tax purposes and that derive income from Oman in the nature of the following are subject
to WHT at 10% of gross income from such sources:

Royalties.
Consideration for research and development.

Consideration for the use of or right to use computer software.

Management fees.

Provision of services (with defined exclusions).

While dividends and interest were initially included in the list above, a Royal Directive issued by His Majesty Sultan Haitham bin Tarik on the
occasion of Accession Day in 2023 called for the complete suspension of withholding tax on the distribution of dividends and interest on non-
resident investors.
Such WHT is required to be withheld by the Omani-based company and paid to the tax department within 14 days of the end of the month in
which tax is deducted or payments are due or made to the foreign company.

Under clarifications issued by Oman tax authorities, WHT on dividends applies only to dividends paid by joint stock companies, not LLCs.

As of 1 March 2018, WHT on services applies whether the services are performed in Oman or abroad. Previously, the tax authorities had taken a
position that services performed entirely outside Oman were not subject to WHT.

The term 'royalty' has been defined under the law to include consideration for the use of IP, including computer software, cinematography films,
tapes, discs, or any other media, patents, trademarks, drawings, etc. The term further includes consideration for using industrial, commercial, or
scientific equipment and consideration for information concerning industrial, commercial, or scientific experience or consideration for granting
rights to exploit mining or other natural resources.

Double tax treaties (DTTs)

The maximum WHT rates provided by the Oman DTTs are shown in the table below. There are also agreements with various countries that are
not yet in force.

The table provides a summary of WHT rates under Oman tax treaties in force as of 1 December 2018. Under some treaties, dividends qualify for
a reduced WHT rate if the beneficial owner is a corporation that owns a specified percentage of the voting power of the distributing corporation.
Also, under some treaties, a lower WHT rate applies to interest on government debt or government-assisted debt.

WHT (%)
Recipient
Dividends Interest Royalties Services

Foreign companies:

Non-treaty 10 10 10 10

Treaty:

Belarus 5 5 10 10 (6)

Brunei 5 10 10 10 (6)

Canada 5 (7)/15 10 0/10 (1) 0

China 5 10 10 0

Croatia 0 5 10 0

France 0 0 7 0

Hungary 0/10 0 8 0

India 10 (7)/12.5 10 15 15 (6)

Iran 10 10 10 0

Italy 5 (8)/10 5 10 10 (6)

Japan 5/10 10 10 0

Korea 5 (7)/10 5 8 0

Lebanon 5 (9)/10 10 10 0

Mauritius 0 0 0 0

Moldova 5 5 10 10 (6)

Morocco 5 (7)/10 10 10 0

Netherlands 0/10 0 8 0

Pakistan 10 (7)/12.5 10 12.5 12.5 (6)

Portugal 5/10/15 10 (3) 8 0

Seychelles 5 5 10 10 (6)
 Singapore 5 7 8 0

South Africa 5 (7)/10 0 8 0

Spain 0 (9)/10 5 8 0

Switzerland 0/5/15 (2) 0/5 (3) 8 0

Syria 5/7.5 10 18 0

Thailand 10 10/15 (4) 15 0

Tunisia 0 10 5 0

Turkey 10 (8)/15 10 10 0

United Kingdom 0/15 (5) 0 8 0

Uzbekistan 7 7 10 0

Vietnam 5 (10)/10 (11)/15 10 10 10 (6)

Notes

1. The 0% rate applies to literary, dramatic, and musical copyright royalties, computer software royalties, and to industrial, commercial, or
scientific experience. The 10% rate applies in other cases.

2. The 0% rate applies if the beneficial owner of the dividends is: (i) the government, a political subdivision, or the central bank; (ii) a pension
scheme; or (iii) in the case of Oman, the State General Reserve Fund, the Omani Investment Fund, and any other statutory body or
institution wholly owned by the government of Oman. The 5% rate applies if the beneficial owner of the dividends is a company (other than
a partnership) that directly holds at least 10% of the capital of the payer company. The 15% rate applies in other cases.

3. The 0% rate applies to interest paid: (i) to the government, a political subdivision, or the central bank; (ii) in the case of Oman, to the State
General Reserve Fund, the Omani Investment Fund, and any other statutory body or institution wholly owned by the government; (iii) on the
credit sale of equipment, merchandise, or services; (iv) on a loan granted by a bank; (v) to a pension fund; or (vi) on inter-company loans. In
other cases, the 5% rate applies.

4. The 10% rate applies to interest paid to financial institutions, including insurance companies. The 15% rate applies in other cases.
5. The 15% rate applies to dividends paid from profits derived directly or indirectly from immovable property by an investment company or
investment fund, the income of which is subject to favourable tax treatment.

6. Applies to technical, managerial, or consultancy services rendered in Oman.

7. 10% minimum shareholding required.

8. 15% minimum shareholding required.

9. 20% minimum shareholding required.

10. 60% minimum shareholding required.

11. 25% to 60% minimum shareholding required.

Corporate - Tax administration

Taxable period
The tax year is the calendar year. Assessments can be made on the basis of a year-end other than 31 December, provided permission is granted
in advance by the Omani tax authorities and the company then adheres to the year-end on a consistent basis. The first tax year of a taxpayer
can be up to a period of 18 months.

Tax returns
Currently a single ‘return of income’ needs to be filed within four months from financial year close. Reasonable time extensions may be sought at
the discretion of the Tax Authority (TA) for filing the annual returns of income, but these do not defer payment of tax, which will be subject to
additional tax at 1% per month from the due date to the actual date of payment.

In the case of companies having a paid-up capital in excess of OMR 20,000, the annual return of income should be accompanied by audited
accounts signed by an auditor registered in Oman. The law requires accounts to be drawn up in accordance with IFRS or any similar standards
as approved by the TA, consistently applied. It specifically provides for accrual accounting unless prior permission of the TA has been obtained.
The accounts must be submitted in local currency unless prior approval of the TA has been obtained for submitting them in foreign currency.
In the case of SMEs falling in the category of the 3% tax rate, the tax returns must be filed and accompanied by a simplified income statement
within three months of the year-end.

Delay or failure in submitting the annual return may attract a penalty of not less than OMR 100 and not more than OMR 2,000.

Failure to file the annual return of income may result in an estimated profit assessment by the TA.

Failure to submit audited accounts as required under the Law is deemed to result in an incomplete annual return of income and may attract an
estimated profit assessment. The requirement of submitting audited financial statements has been relaxed for SME taxpayers who fall in the
category of the 3% tax rate.

The law confers wide powers on the TA for requesting information. Experience has shown that, notwithstanding the presentation of audited
accounts, the tax department requests very detailed information and supporting documentation relating to revenue and expenses. Failure to
provide such information or the provision of incorrect information can result in an additional assessment by the TA and/or various penalties on the
company and/or the officer responsible for providing the information.

Payment of tax
Tax should be paid with the Final Return of Income due within four months of the year-end. Failure to pay taxes by the due date attracts interest
at the rate of 1% per month from the date on which such tax was due to the date of payment.

Please note that taxpayers have the option of payment of taxes in instalments subject to fulfilment of certain conditions and prior approval from
the TA. Further, taxpayers are allowed to settle income tax instalment amounts falling due only during the calendar year 2021, without application
of delay fines on the amounts (instalments) paid beyond the statutory due dates.

The difference between the amount paid and the amount assessed, subject to filing of an objection, should be paid within one month from the
date of the assessment. The additional amount assessed attracts interest at the rate of 1% per month from the date on which such tax was due
to the date of payment.

Under the Law, the TA has the authority, with the approval of the Minister and the Tax Committee, to sequester and sell the assets of a taxable
entity to recover the taxes due.

If decisive proof is presented to the TA that any person has paid tax for any year exceeding the tax due and payable for such tax year as finally
settled, such person has the right to recover the tax. However, if any tax has become payable by such a person in respect of another tax year,
the excess amount will be adjusted against the future tax liability. Any request for recovery must be presented within five years from the end of
the tax year in which the right to refund arises; otherwise, such right shall lapse.

Where the taxpayer fails to declare correct income in the tax return for any tax year, the TA may impose a fine in the range of 1% to 25% of the
difference between the amount on the basis of the correct taxable income and the amount of tax as per the return submitted.

Objections and appeals

A company has a right to object to any assessment issued by the TA. The objection document should be prepared in writing (in English and in
Arabic) and filed with the office of the TA within 45 days from the date of assessment. The TA is required to give a judgement within five months,
extendable up to another three months at the TA’s discretion, from the date of receiving the objection. The tax demanded may be kept in
abeyance on request. No additional tax is payable until the TA issues the judgement.

Once the objection decision is issued, the tax is payable immediately and no further deferment is available. A grievance can be filed with the Tax
Grievance Committee within 45 days from the date of the objection decision.

The Law permits the taxpayer to file tax suit before the Primary Court against the decision issued by the Tax Grievance Committee within 45 days
from the date of serving the notification of the Committee’s decision. Either the Tax Authority or the taxpayer may contest against a
judgement issued by the Primary Court through appeal before the Court of Appeal and then before the Supreme Court. The provisions of the Civil
and Commercial Procedures Law shall apply for matters not covered in the Income Tax Law, when hearing and making final judgement over the
tax suit.

Statute of limitations
The Royal Decree 9/2017 introduced the self-assessment regime, where the assessments are carried out on a sample basis and the statute of
limitation is three years from the end of the year in which a tax return is submitted. Where the entity has not submitted the tax returns, the tax
authorities have a period of five years to complete the assessments.

Maintenance of records
The Law requires accounting records and supporting documentation to be maintained for ten years after the end of the accounting period to
which these records relate.

Topics of focus for tax authorities

Related-party transactions are likely to attract particular scrutiny by the tax authorities. Taxpayers should maintain extensive documentation that
proves that transactions are carried on at arm’s length.
Oman contacts
Darcy White
Partner, PwC Oman

+968 24 55 9154

Gaurav Kapoor
Director, PwC Oman
+968 93 89 1546

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