Oman

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.