Oman Personal Income Tax – Key Highlights

July 4, 2025

Waiver of Administrative Penalty for failing to submit a Corporate Tax registration application within the deadline

Important definitions

Tax Resident: A person present in Oman for 183 days or more in a tax year
Tax Year: Calendar year from January 1 to December 31
Gross Income: All executory amounts and benefits received by the person during the tax year according to the provisions of this Law
Net Income: The amount exceeding 42,000 Omani Rials from the Gross Income
Taxable Income: The Net Income minus the value of exemptions, costs, and losses deductible under this Law, as well as exemptions granted under international agreements

Scope of law

An annual tax shall be imposed on the Net Income of the Person as follows:

Residents are taxed on global income
Non-residents are taxed on income sourced in Oman

Applicability

The law will come into effect on 01 January 2028

Taxable sources of income

The Gross Income of the Person consists of all or some of the following sources:

Salaries and wages
Self-employment
Leasing
Royalties
Interest
Profits from shares, quotas, and sukuk, and proceeds from their disposal
Proceeds from the disposal of real estate assets
Retirement pensions and end-of-service benefits
Prizes
Grants and gifts
Membership remunerations

Tax Rate

The tax is due at a rate of 5% of the Taxable Income

Which income is Exempted

Exemptions include:

Income of foreign diplomats (with reciprocity)
Additional allowances for Omani diplomats abroad
Income of a resident earned outside Oman for 18 months after return
Overseas income of Omani residents
Certain pension contributions
Education and healthcare expenses
Capital gains from sale of primary residence (after 2 years of registration)
Donations (up to 5% of gross income)
Income realized from industrial property rights related to patents, designs and drawings, models, trademarks, and secret methods or formulas. (exempt for first 5 years from the date of registration)

Carry forward of losses

Losses can be carried forward up to 5 years, but only from:

Self-employment
Leasing
Disposal of real estate assets
Disposal of shares, quotas, sukuk, and bonds

Tax Returns

A tax return is required if gross income exceeds OMR 42,000
Filing deadline: Within 6 months from the end of tax year
If the Person has no other source of income other than salaries and wages, membership remunerations, or retirement pensions paid from a single employer, the employer is obligated to submit the return on his behalf upon his request on the forms prepared for this purpose, as specified by the Regulations

Amendment of Return

If the Person discovers, within 3 years following the end of the period specified for submitting the tax return, that the return he submitted contained an error or omission, he must submit an amended return to the Authority within 30 from the date of discovering the error or omission which shall be considered as an original return.

Payment of Tax

Normally due when the return is filed
The Employer is obligated to pay the amounts required to be withheld for the account of the tax on salaries and wages, retirement pensions and end-of-service benefits, and membership remunerations

Control and Audit

The person obligated to pay the tax must keep the records, documents, data, information, invoices, and others for a period of 5 years from the date of submitting the return
The Authority may annually audit the tax returns of individuals

Penalties

A fine of not less than 1,000 Omani Rials and not more than 5,000 Omani Rials shall be imposed on anyone who commits any of the following acts in violation of the provisions of this Law:

Intentionally refraining from submitting the tax return within the prescribed deadlines
Intentionally refraining from complying with the Authority’s request to submit records, documents, data, information, invoices, or others, related to the tax
Intentionally refraining from withholding the amounts required to be deducted for the account of the tax
Intentionally refraining from paying the amounts he has withheld for the account of the tax

Imprisonment for a period of not less than 1 year and not more than 3 years, and a fine of not less than 10,000 Omani Rials and not more than 20,000 Omani Rials, or one of these two penalties, shall be imposed on anyone who commits any of the following acts in violation of the provisions of this Law:

Stating incorrect data in the tax return with knowledge thereof.
Attaching forged records, documents, information, data, invoices, or others to the tax return with knowledge thereof.
Intentionally destroying, concealing, or disposing of records, documents, information, data, invoices, or others, before the end of the period specified for their retention.