Foreign tax credit
A foreign tax credit is available to Omani companies or establishments (proprietorships) who 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 Secretariat General for Taxation to claim such credit.
Income from the principal activities listed below is exempt from tax, provided an exemption is applied for and obtained.
- Industry and mining.
- Export of products manufactured or processed locally.
- Operation of hotels or tourist villages.
- Agriculture and animal husbandry and the processing of agricultural produce.
- Fishing and fish processing and aquaculture.
- University education, college or institutes of higher studies, private schools, nurseries, training colleges, and institutes.
The exemption is valid for a period of five years from the date of commencement of production or the practice of activities and may be made subject to such conditions as the Minister of Commerce and industry may specify. The exemption is renewable for a period not exceeding five years, subject to approval by the Financial Affairs and Energy Resources Council.
Effective for tax years beginning after 31 December 2016, tax exemptions will be available only for industrial (manufacturing) activities. Exemptions will no longer be available for mining, export of locally manufactured goods, operation of hotels and tourist villages, agriculture, fishing, or education.
In addition, new industrial exemptions will be limited to the initial five-year period, with no renewal.
Existing tax exemptions will not be impacted, but the changes will look to impact pending renewal applications.
See Exempt income in the Income determination section for a description of other income items exempt from tax.