• The standard rate of 5% VAT will apply on goods and services supplied in Oman, subject to specific exemptions and zero ratings prescribed under Oman VAT law.

• There is a mandatory registration requirement if the total value of annual supplies exceeds or is expected to exceed OMR 38,500.

• Exempt supplies are not subject to VAT, and the input tax in relation to exempt supplies cannot be recovered. Examples of exempt supplies include certain financial services, local passenger transportation services, education services, renting of residential property, etc.

• Zero-rated supplies are subject to VAT at 0%, and the supplier can avail input VAT credit in respect of goods / services used for making zero-rated supplies. Examples of zero-rated supplies include export of goods and services outside Oman, international transportation services, basic food items, etc.

Cross-border payments subjected to withholding tax and at a flat rate of 10% on the gross payment in Oman are :

• Royalties
• Management Fees
• Provision of Services
• Consideration for R&D
• Consideration for Computer Software

The following are exempt from income tax in Oman:

• Dividends received from an Omani company
• Gains on the disposal of Securities listed in the Muscat Stock market
• Omani marine companies
• Foreign Airlines
• Investment funds
• Foreign companies engaged in the exploration of gas and oil
• Foreign companies working for government projects

Various aspects of Taxation in Oman are:

• Registration with the Secretariat General of the Ministry of Finance is mandatory for all taxable entities
• A provisional return of income tax must be filed within 3 months of the applicable accounting period
• A uniform 15% income tax rate is applicable for all companies irrespective of nationality and size.
• The final tax return must be filed within 6 months of the applicable accounting period

The 3% tax rate is effective and is coupled with a requirement for SME taxpayers to file income tax returns.

Up to 30,000 OMR (Omani Riyals) - 0%

Above 30,000 OMR - 12%

For Enterprise - 3%

Others - 15%