Oman

On 30 May 2024, the Sultanate of Oman and the Republic of Ireland (‘the contracting states‘) signed a Double Tax Avoidance Agreement (DTAA). The date that this agreement goes into effect is subject to completion of administrative procedures.

On 8 June 2023, Oman and Russia (‘the contracting states‘) signed a DTAA. A Royal Decree (RD 89/2023) was issued on 27 December 2023 by His Majesty the Sultan of Oman, ratifying the DTAA, which was published in the Official Gazette on 31 December 2023. Given that Oman and Russia have both ratified and formally notified each other of the completion of the ratification procedures, the DTAA has come into effect on 1 January 2024.

On 22 May 2023, Oman and Egypt signed a DTAA. There is no clarity yet on the terms of the agreement signed; however, we understand that the agreement covers avoidance of double taxation and prevention of income and capital tax evasion. The effective date is subject to completion of the administrative procedures.

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

While dividends and interest were initially included in the list of payments made to foreign entities that attract WHT, a Royal Directive issued by His Majesty Sultan Haitham bin Tarik on the occasion of Accession Day (11 January 2023) called for the complete suspension of WHT on the distribution of dividends and interest on non-resident investors.

The OTA has recently issued value-added tax (VAT) guides on the below topics: 

• VAT Guide for Input Tax: This guide provides clarifications/guidance on key matters relating to input tax credit, specifically input tax incurred by employees, blocked input tax, alternative methods for input tax apportionment, administrative practices for claiming input tax based on supplier’s tax invoices, etc.
• VAT Guide for Promotions: This guide provides key clarifications/guidance on various matters in terms of promotion of commercial activities, specifically discounts offered to customers, gifts and samples, sale of vouchers, loyalty points, etc.
• VAT Guide for Charities and Non-Profit Organisations: This guide provides guidance for charities/non-profits in Oman and associated suppliers on key matters relating to economic activities carried out by such entities, input tax deduction, exemptions from VAT on imports, issuance of tax invoices, etc.