Business Taxation in Oman – Guide and Tips

Published on September 29, 2025 and written by Cyril Jarnias

Oman, an emerging destination for international investors, offers an attractive tax environment for businesses. This article explores in detail the Omani tax system, its benefits, and obligations for companies looking to establish operations there.

The Omani Tax Landscape: An Overview of Business Taxes

Oman’s tax system is designed to encourage foreign investment while ensuring equitable contribution to the country’s economic development. Here are the main taxes businesses may be subject to:

1. Corporate Tax

Corporate tax is one of the main tax burdens for businesses operating in Oman. The standard rate is set at 15% for most companies. However, there are notable exceptions:

– Oil companies are subject to a higher rate, typically around 55%. – Small businesses benefit from a special tax regime with a reduced rate of 3% if they meet certain conditions.

2. Value Added Tax (VAT)

Oman introduced VAT relatively recently, in 2021. The standard rate is 5%, which is relatively low compared to many other countries. Some essential goods and services are exempt or subject to a zero rate.

3. Customs Duties

Customs duties in Oman are generally set at 5% for most imported products. However, some products may be subject to higher rates or be exempt, depending on their nature and origin.

4. Municipal Taxes

Businesses may be subject to various municipal taxes, including on commercial property rentals. These taxes vary by municipality but are generally moderate.

5. Social Contribution

Employers must pay a social contribution for their Omani employees, typically around 11.5% of the base salary.

Registering with Omani Tax Authorities: A Simplified Process for Businesses

Tax registration in Oman is a crucial step for any business wishing to operate legally in the country. The process has been simplified in recent years to encourage foreign investment.

Registration Steps:

1. Obtaining a Commercial License: Before registering with tax authorities, the company must obtain a commercial license from the Ministry of Commerce and Industry.

2. Commercial Registration: The company must register with the Omani commercial registry.

3. Tax Registration: Once the license is obtained and commercial registration completed, the company can register with the Oman Tax Authority.

4. Obtaining Tax Identification Number: After registration, the company receives a unique tax identification number.

5. VAT Registration: If the company’s annual turnover exceeds the VAT registration threshold (currently set at 38,500 OMR), it must also register for VAT.

Required Documents:

– Copy of commercial license – Copy of commercial registration certificate – Copy of company statutes – Copy of shareholders’ and directors’ passports – Completed tax registration form

The registration process can generally be completed online through the Oman Tax Authority portal, which greatly facilitates the process for foreign investors.

Tax Obligations in Oman: A Strictly Enforced Schedule

Once registered, a company in Oman must comply with several tax obligations to remain in compliance with the law. Here are the main obligations to know:

1. Corporate Tax Return

– Frequency: Annual – Deadline: Within 4 months after the end of the fiscal year – Content: Audited financial statements, detailed tax calculation

2. Provisional Payments

– Frequency: Quarterly – Deadline: No later than the 10th day of the 4th, 6th, 9th, and 12th month of the fiscal year – Amount: 25% of estimated tax for the current year

3. VAT Returns

– Frequency: Monthly or quarterly depending on turnover – Deadline: Within 30 days after the end of the reporting period – Content: Details of taxable sales and purchases, collected and deductible VAT

4. Withholding Taxes

– Frequency: Monthly – Deadline: Within 14 days after the end of the month – Rate: Varies by payment type (generally 10% for payments to non-residents)

5. Social Contribution

– Frequency: Monthly – Deadline: Within 15 days after the end of the month – Base: Salaries of Omani employees

6. Record Keeping

Companies are required to maintain all accounting and tax documents for a minimum period of 10 years.

7. Tax Audit

Omani tax authorities may conduct tax audits. Companies must be prepared to provide all necessary documentation upon request.

Double Taxation Agreements: A Major Advantage for International Investors

Oman has signed numerous Double Taxation Agreements (DTAs) with other countries, which enhances its attractiveness for international investors. These agreements aim to prevent income from being taxed twice, once in the source country and once in the beneficiary’s country of residence.

Main Countries with DTAs with Oman:

• France
• United Kingdom
• China
• India
• Singapore
• Netherlands
• South Korea
• Japan
• Canada
• Italy

These agreements generally cover the following aspects:

– Reduction of withholding tax rates on dividends, interest, and royalties – Definition of permanent establishment – Methods for eliminating double taxation – Information exchange between tax authorities

Benefits for Investors:

1. Reduction of Overall Tax Burden: DTAs often allow for reduced withholding tax rates.

2. Legal Security: These agreements provide a clear framework for resolving tax disputes.

3. Facilitation of Capital Flows: By reducing tax barriers, DTAs encourage cross-border investments.

4. Prevention of Tax Evasion: Information exchange clauses help combat tax fraud.

Oman vs Other Offshore Jurisdictions: A Serious Competitor on the International Stage

Oman is increasingly positioning itself as an attractive alternative to traditional offshore jurisdictions. Here’s a comparison with some popular destinations:

1. Oman vs Dubai (UAE)

– Tax Rate: Oman 15% vs Dubai 0% (excluding specific sectors) – Political Stability: Oman offers comparable political stability – Cost of Living: Generally lower in Oman – Infrastructure: Less developed than Dubai, but rapidly improving

2. Oman vs Singapore

– Tax Rate: Oman 15% vs Singapore 17% – Ease of Doing Business: Singapore ranks better, but Oman is progressing rapidly – Geographic Position: Oman offers better access to Middle Eastern and African markets

3. Oman vs Mauritius

– Tax Rate: Oman 15% vs Mauritius 15% (with reduction opportunities) – Tax Treaties: Mauritius has more DTAs, but Oman is catching up – Economic Stability: Oman offers a more diversified and stable economy

Oman’s Competitive Advantages:

– Political and Economic Stability: Oman is recognized for its stability, a major asset in the region. – Strategic Geographic Location: Easy access to Middle Eastern, African, and Asian markets. – Rapidly Developing Infrastructure: Massive investments in ports, airports, and special economic zones. – Continuously Improving Regulatory Framework: Ongoing efforts to simplify procedures and attract foreign investment. – Relatively Low Cost of Living: Allows significant operational savings compared to other financial centers.

In conclusion, Oman presents itself as an attractive tax destination for businesses, offering a balance between competitive tax rates and a stable, growing economic environment. With its continuous efforts to improve its regulatory and tax framework, Oman is well positioned to become a major player in the landscape of attractive offshore jurisdictions.