Published on and written by Cyril Jarnias
Moving to Oman is attracting more and more expatriates in search of sunshine, safety, and a relatively lenient tax framework. But behind the image of a “tax-free paradise” looms a major reform: the introduction of an income tax starting in 2028, a first in the Gulf. At the same time, real estate taxation remains particularly attractive for foreign investors, with a total absence of annual property tax and a very well-defined framework for property purchases.
Understanding the Omani tax landscape is crucial for expatriates working, investing, or considering settling there. The analysis should focus on two main aspects: income tax and property taxation.
A Historically Very Favorable Tax Environment
Until now, Oman was one of those rare countries where individuals, whether nationals or foreigners, paid no tax on their income. Salaries, dividends, rents, capital gains, interest: all of this escaped personal income tax. There is also no wealth tax, inheritance tax, or gift tax for individuals.
In real estate matters, the country stands out for its lack of an annual property tax. Owning a property, even one of very high value, does not generate any recurring levy like a residential tax or property tax. The only recurring charges are private (condominium fees, management fees, insurance, etc.). Occasional taxation applies only to transactions or rental income.
This very light model for individuals is part of an economic diversification strategy framed by Oman Vision 2040, which aims to reduce dependence on hydrocarbons, still responsible for about 70% to 85% of state revenues depending on the period.
The Arrival of Income Tax: A Turning Point Starting in 2028
The major change, for expatriates as well as Omanis, is now official: a personal income tax will come into effect on January 1, 2028. The legal framework is already in place via a royal decree (No. 56/2025) published in the Official Gazette, meaning the reform is no longer at the political project stage but is now positive law, with a few-year implementation period.
Who Will Actually Be Subject to This Tax?
The new regime is based on a very high threshold: only annual incomes exceeding 42,000 OMR will potentially be taxable. In dollar equivalent, this represents approximately 109,000 USD. In practice, the government estimates that 99% of the population will remain outside the scope of this tax, which therefore targets a small fraction of high-income earners – senior executives, highly qualified professionals, entrepreneurs with high compensation.
This point is crucial for expatriates: most foreign employees, even those well-paid compared to the local average, will not cross this threshold. Those who exceed it, however, will need to incorporate this new tax into their compensation and wealth strategy.
How Will the Income Tax Be Calculated?
The mechanism provided by the law is relatively simple on paper, but it is important to distinguish several concepts.
A first comparison table helps grasp the spirit of the reform:
| Key Element | Value / Main Rule |
|---|---|
| Effective Date | January 1, 2028 |
| Tax Rate | 5% (single rate) |
| Trigger Threshold | 42,000 OMR gross annual income |
| Affected Population (estimate) | Approximately 1% of residents |
| Scope of the Tax | Worldwide income for tax residents |
| Competent Authority | Oman Tax Authority (OTA) |
The text defines several steps to arrive at the taxable base. First, there is “gross income,” which includes most resources received during the year: salaries, fees, rents, financial income, pensions, etc. Then, the law provides for a standard deduction of 42,000 OMR to obtain a “net income,” followed by consideration of exemptions and deductible expenses to arrive at “taxable income.” The 5% rate applies to this taxable income, not to the entire gross income.
A significant fixed allowance will be applied, effectively exempting low and middle-income earners. Only individuals whose income significantly exceeds this threshold will be liable for the tax, in accordance with the calculation rules to be detailed in the implementing regulations.
Which Expatriate Incomes Will Be Taken into Account?
The scope of the tax is broad for tax residents. It notably includes:
– salaries, bonuses, commissions, allowances, and other remuneration,
– income from self-employment and freelance activities,
– rental income and lease receipts,
– interest and certain financial income,
– profits from shares, units, bonds, sukuk, as well as their capital gains on disposal,
– retirement pensions and end-of-service indemnities,
– board of directors’ fees,
– certain exceptional gains (prizes, endowments, etc.).
For an expatriate considered a tax resident, this income will be taken into account on a global scale, not just that earned in Oman. This is a profound change from the current 0% model.
The Tax Residency Criterion for Expatriates
Tax resident status for an individual is based primarily on physical presence in the country. The key rule is as follows: any person spending at least 183 days in Oman during a calendar year (continuously or not) is considered a tax resident. Additional criteria like the existence of a permanent home or vital interests in the country may come into play in the context of tax treaties, but the 183-day bar remains the decisive element.
An expatriate with a stable job in Oman and effectively residing there for most of the year is considered a tax resident. Therefore, they are potentially subject to income tax if their income exceeds the established tax threshold.
Residents vs. Non-Residents: Impact for Expatriates
The law clearly distinguishes between what applies to tax residents and non-residents.
| Expatriate Status in Oman | Main Tax Situation |
|---|---|
| Tax Resident (≥ 183 days) | Taxation on worldwide income above 42,000 OMR |
| Non-resident conducting professional activity in Oman | Taxation via corporate tax or existing withholding taxes (15% or 10% depending on the case), but not via the new PIT on all worldwide income |
An expatriate employee living in Oman year-round will therefore, in practice, be subject to this new regime if they cross the threshold. A foreign consultant coming occasionally for short assignments will remain under the existing rules for non-residents (tax on professional profits, withholding tax, etc.), without entering the new PIT system, unless they exceed 183 days and thus create a tax residency link.
Deductions and Exemptions: A Tax Calibrated to Spare the Middle Class
To make the reform socially acceptable, the legislator has provided for a set of deductible expenses and exempted incomes, which further reduce the taxable base, even for high-income earners.
Deductible expenses notably include: office expenses, social charges, travel expenses, and training costs.
– education expenses for the taxpayer and their family,
– certain health expenses,
– certain housing-related costs,
– contributions to pension or provident schemes (limited to two schemes),
– interest related to a bank loan for the construction or purchase of a primary residence (once in a lifetime),
– donations and zakat paid to recognized organizations, capped at 5% of gross income.
On the exempt income side, several categories directly interest expatriates and investors:
The Cypriot tax regime offers several notable exemptions for new residents. Salaries earned abroad may be exempt for 18 months. The sale of a primary residence is non-taxable after two years of ownership, and the sale of a secondary residence benefits from a one-time exemption. Inheritances and direct line gifts are exempt, as is interest on certain public securities. Finally, intellectual property income is exempt for the first five years following its registration.
This framework significantly reduces the risk for an expatriate of being heavily taxed, even above the threshold, especially since the single rate of 5% remains very low compared to major Western economies, where the marginal rate can climb to 45% in the UK or 40–45% in continental Europe.
Individuals’ Filing Obligations and Employers’ Role
For individuals, any person whose annual gross income exceeds 42,000 OMR must file a tax return, even if, after allowances and exemptions, the final tax is zero or low. This return must be submitted electronically within six months following the end of the fiscal year, i.e., in practice by June 30 of the following year at the latest. Payment of the tax due will be made at the same time.
In case of a permanent departure from Oman, a tax resident must also file a return at least 60 days before departure, except in cases of force majeure. Accounting records and supporting documents must be kept for five years.
For employers, the reform gives them a central role: companies, public bodies, and certain institutions will be required to withhold at source on salaries, pensions, end-of-service indemnities, and attendance fees paid to their employees or directors. This withholding will then be remitted to the Omani Tax Authority according to a schedule to be specified by implementing regulations. For employees with only one employer and no other source of income, the company may even file the tax return on their behalf, upon request.
Before 2028: A Regime Still Without Income Tax
Until this new law comes into effect, the landscape remains unchanged for expatriates: there is no personal income tax in Oman. Salaries, even very high ones, are not subject to any such levy. Rents received by an individual, interest, dividends, capital gains, as well as pensions, are not taxed at the individual taxpayer level.
Foreign workers who are not GCC nationals are completely exempt from social security contributions in Oman.
This window of several years before 2028 therefore gives expatriates significant time to plan for any potential tax increase, or adjust their residency statuses, remuneration methods, and investment strategies.
Real Estate Taxation: A Major Asset for Expatriate Investors
On the real estate front, Oman offers a particularly attractive framework for foreigners: no annual property tax, no capital gains tax on property for individuals, no inheritance tax, and relatively contained transaction fees. In return, property ownership rules for non-Omanis are very regulated.
No Annual Property Tax: A Real Difference with Europe
Unlike many countries where owning property comes with a significant recurring charge, Oman does not levy any annual tax on the value of residential or commercial properties for individuals. No administration assesses the rental or market value of the property to apply a rate: this dimension simply does not exist.
For an expatriate considering purchasing a second home or an investment property, this strongly reduces the long-term cost of ownership and secures projections of net yield.
Municipal Tax on Rents: The Only Recurring “Property Tax”
The only regular taxation affecting real estate for individuals is the municipal tax on rents. It applies to property owners who rent out their property. The principle is simple: local authorities levy 3% on the gross amount of annual rents. No deductions for repairs, vacancy, or miscellaneous expenses are provided for in this calculation.
The system can be summarized as follows:
| Real Estate Taxation Element | Main Rule for Individuals |
|---|---|
| Annual Property Tax on Ownership | None |
| Municipal Tax on Rents | 3% of gross annual rent, paid by the landlord |
| Capital Gains Tax on Property | None for individuals |
| Inheritance Tax on Property | No specific tax |
For a foreign investor, this levy remains reasonable, especially in a context where gross rental yields in certain integrated projects can be around 5 to 7%, or even more in certain segments. The 3% municipal tax simply slightly reduces the net yield, without calling into question the investment’s appeal.
No Capital Gains Tax on Property for Individuals
Another key advantage: reselling a property held privately does not trigger taxation on the capital gain realized. Whether one bought an off-plan villa in an integrated tourism complex and sold it a few years later at a significantly higher price, the capital gain is not taxed as such in Oman for an individual.
Only companies fall within the scope of corporate tax and will have their real estate gains integrated into their taxable income at 15% (excluding specific cases in the petroleum sector at 55%).
No Inheritance Tax or Gift Tax
Oman does not have an inheritance tax or gift taxes in the manner of many European countries. Transferring a property to heirs or within the immediate family does not give rise to a specific tax levy. The upcoming income tax law also confirms that inheritances and certain gifts between spouses and parent-children will be explicitly excluded from the taxable base.
For expatriates, estate settlement is generally conducted according to the laws of their country of origin or, failing that, under the influence of Islamic inheritance principles. It is therefore prudent to structure one’s assets with legal advice. The purely tax angle, however, is particularly favorable.
Property Transfer Fees: The Only Significant Cost at Purchase
In the absence of an annual property tax, it is at the time of acquisition that the main tax cost occurs. Property transfer is subject to a transfer fee (often called “stamp duty”) calculated as a percentage of the sale price. For expatriates, the rate is 3% of the transaction value.
Since 2026, nationals benefit from a reduced rate of 1%, while operations financed via Islamic banks are subject to an even lower rate, around 0.5%. Authorities also foresee certain exemptions for low-income individuals, retirees, or persons with disabilities.
Summary of different data transfer rates for storage media
Theoretical transfer rate up to 480 Mbps (60 MB/s). Widely used standard for common peripherals.
Formerly USB 3.0, offers a theoretical speed up to 5 Gbps (625 MB/s).
Doubled theoretical speed, reaching up to 10 Gbps (1.25 GB/s).
Based on the Thunderbolt 3 protocol, supports speeds up to 40 Gbps (5 GB/s).
Universal interface offering speeds up to 40 Gbps (5 GB/s) and supporting charging, video display, and data transfer over a single cable.
| Buyer Profile or Type of Operation | Property Transfer Fee Rate on Price |
|---|---|
| Foreign Buyer (expatriate, non-Omani) | 3% |
| Omani Buyer | 1% (reduced since 2026, previously 2%) |
| Operations via an Islamic Bank | 0.5% |
In addition to this tax, the Ministry of Housing and Urban Planning charges fixed fees for registering the title deed (on the order of 10 to 100 OMR depending on the case), sometimes accompanied by cadastral and administrative validation fees. In total, including lawyer fees, real estate agent fees, and any financing costs, closing costs for a foreign buyer are estimated to average around 5 to 9% of the property price, which remains competitive compared to many other markets.
VAT and Real Estate: Residential Largely Exempt
Oman introduced a 5% VAT in 2021, but the legislator chose to exempt basic housing transactions. Sales and rentals of residential properties are generally VAT-exempt, which avoids increasing housing costs for individuals.
However, VAT may apply:
– to transactions on commercial real estate (offices, shops, warehouses, etc.),
– to property-related services (agency fees, lawyer fees, management services, certain works),
– and to part of the services provided by developers and managers.
The tax impact for an expatriate buying a residential property to live in or rent out therefore remains very limited from a VAT perspective.
Buying as an Expatriate: Permitted Areas and Associated Taxation
While property taxation is light, access to ownership is, itself, very regulated for foreigners. Oman has chosen to concentrate market opening to non-Omanis in specific areas, Integrated Tourism Complexes (ITCs).
Integrated Tourism Complexes (ITCs): The Heart of the Market Accessible to Foreigners
ITCs are large-scale real estate developments combining housing, hotels, shops, marinas, golf courses, leisure facilities, in an integrated tourism destination logic. Within these perimeters, foreigners can acquire properties under freehold ownership or as very long-term usufruct rights (up to 99 years).
Among the main ITCs accessible to expatriates are:
– Al Mouj Muscat
– Muscat Hills
– Jebel Sifah
– Hawana Salalah
– Muscat Bay
– Yiti and AIDA
– Sultan Haitham City
– Saraya Bandar Jissah
These specific real estate projects constitute the main entry points for foreign investors. They also concentrate the majority of sales targeted at expatriates.
Outside of ITCs, possibilities for a non-Omani are very limited. However, certain texts have conditionally opened up the purchase of an apartment in high-rise buildings located in designated urban areas, for foreigners residing in Oman for at least two years and over the age of 23, with quotas capping their share of ownership in each building.
Some regions also remain totally closed to foreigners (Musandam, Buraimi, Dhahirah, Al Wusta, and some strategic coastal wilayas). Agricultural land is also prohibited for non-citizens.
Recurring Costs for Owners in ITCs
In lieu of a state property tax, the main annual charge for an expatriate owner in an ITC lies in the condominium and common service charges. These amounts, set by the management companies of the complexes, notably cover:
Services provided by the condominium for the comfort and enhancement of the entire property development.
Implementation and management of security systems to ensure the protection of residents and property.
Regular maintenance of gardens, pools, beaches, and common areas to ensure a pleasant living environment.
Administration and maintenance of parking lots, sports clubs, internal roads, marinas, and other collective facilities.
Establishment, where applicable, of a financial reserve to fund major future works and investments.
These charges are generally calculated per square meter and vary depending on the project’s standard and the extent of facilities.
| Type of Charge in an ITC | Observed Cost Level (indicative range) |
|---|---|
| Service / Condominium Charges | Approximately 4 to 12 OMR per m² per year |
| Contribution to Reserve Fund | Approximately 0.10 to 0.40 OMR per m² per year |
| Municipal Tax on Rents (if renting out) | 3% of gross annual rent |
For a medium-sized apartment, the annual bill can therefore range between a few hundred and over a thousand OMR per year, depending on the location and service level. These private costs nevertheless remain incomparable to a heavy property tax like in some Western countries, especially for high-end properties.
Residency, Investment, and Taxation: The Key Triad for Expatriates
Beyond taxation alone, Oman seeks to attract long-term resident-investors via a set of tools combining visas, property rights, and a competitive tax regime.
Residency by Investment Programs
The country has implemented an Investor Residency Programme (IRP), often presented as a sort of local “golden visa”. This program offers long-term residence permits for foreigners injecting significant capital into the Omani economy, notably through real estate in ITCs.
The scheme comes in several tiers:
Minimum investment in OMR to obtain a 10-year renewable residence permit in Oman.
In the specific case of ITC real estate, some schemes provide for 5 or 10-year residencies for purchases starting from 100,000 or 200,000 OMR depending on the projects and periods, although exact thresholds vary.
The combined advantage for an expatriate is then threefold: possibility of long-term stay, holding a tangible asset in a relatively stable economy, and a very favorable tax environment with, for the moment, no taxation on rents or capital gains, and a future low-rate income tax targeting only very high incomes.
Cross-Border Tax Risks and Double Taxation Treaties
For expatriates from countries imposing worldwide tax residency (like France, the UK, or the United States), moving to Oman does not necessarily mean the end of all obligations to their home tax administration. Some states, starting with the United States, tax their citizens regardless of their place of residence and impose reporting obligations on bank accounts and structures abroad.
Oman has signed double taxation avoidance agreements with more than 30 countries, including its main partners in Europe, Asia, and Africa. These treaties specify the taxation rules for real estate income, salaries, pensions, and dividends in a cross-border context. They also establish tax credit mechanisms to prevent double taxation of the same income.
For the highest income earners who will enter the scope of the Omani income tax in 2028, these treaties will play an important role in articulating local taxation with that of the home country, particularly when income remains taxable in both jurisdictions.
Between Stability and Changes: How Does Oman Position Itself for Expatriates?
By combining no property tax, reasonable transaction fees, no capital gains tax for individuals, and a future 5% income tax reserved for the very highest earners, Oman retains a very competitive profile in the region. The comparison with high-tax countries is clear for an executive earning more than 100,000 euros per year: even being in the tiny fraction of residents subject to the tax, the burden would remain far lower than what they would bear in Europe or North America.
Three key structural elements to master for a successful installation in the Sultanate of Oman.
Understanding the conditions for obtaining a work visa, registration procedures, and country-specific legal obligations.
Understanding Omani cultural codes, traditions, and professional practices for smooth integration.
Managing practical aspects: housing, transportation, healthcare system, and cost of living to organize one’s move.
– The 2028 horizon: until this date, no local income tax is due, but one must anticipate what comes next, especially if planning a long-term installation.
– Tax residency status: crossing or not crossing the 183-day threshold, and thus becoming a tax resident of Oman, will have major consequences on how one’s worldwide income is treated.
– The real estate framework: the absence of an annual property tax and capital gains tax for individuals, combined with stable transfer fees and predictable condominium charges, makes real estate in ITCs a particularly interesting investment vehicle, especially when coupled with a long-term visa.
Oman combines a structured legal environment with a still attractive taxation, gradually introducing an income tax without sacrificing its appeal for expatriates and real estate investors. For those who anticipate and get guidance from competent advisors, this transition can represent an opportunity to secure a lifestyle and investment framework that is durably advantageous.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
