Oman

Corporate - Significant developments

Last reviewed - 24 June 2021

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 Oman Tax Authority announced the suspension of 'local filing' requirements for multinational groups headquartered outside Oman till further notice, however please note that 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 yet to ratify the MLI.

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.

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, 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:
  1. Companies that begin operating during the period January 2021 to December 2022, in sectors aimed at economic diversification, will be exempt from income taxes
  2. Hotel establishments will be exempt from income tax due for tax years 2020 and 2021
  3. 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
  4. Taxpayers that file corporate income tax returns and settle income tax amounts within the prescribed statutory due date were eligible for (a) reduced tax rate of 12% and (b) 1% rebate on tax liability
  5. Tax losses declared for tax year 2020 can be carried forward for set off against future taxable income, indefinitely – that is, without being restricted to 5 years carry forward.

See the Tax administration section for a description of tax measures announced in response to COVID-19.