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. Qatar is yet to ratify.
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.