Oman: Business Environment

Accounting Rules

Tax Year: The tax year is the calendar year; however, a different accounting year can also be accepted if followed consistently. Newly established companies can choose to have an opening period of 12 months or a maximum period up to 18 months.
Accounting Standards: International Financial Reporting Standards (IFRS) are required to be applied by all companies in Oman. IFRS are applied as promulgated by the International Accounting Standards Board without any amendment.
Accounting Regulation Bodies: CMA
Accounting Reports: The main financial documents in Oman are statement of financial position, statement of income, statement of changes in equity, statement of cash flows and notes to the financial statements.
Publication Requirements: Companies offering Securities for Public Subscription must submit to the CMA annual, half year and quarterly reports on its activities and the results of its business, that include statements with regard to the sound financial position of the company. Companies are also required to publish a comprehensive summary of these reports in two daily newspapers, one of which, at least, must be in Arabic.
Licensed banks are required to submit an annual report to the Central Bank of Oman in accordance with IFRS.
Professional Accountancy Bodies: OACPA , Omani Society of Certified Public Accountants
Certification and Auditing: According to the Law Organising the Accountancy and Auditing Profession, accountants must obtain a license from the Ministry of Commerce and Industry. Foreign accounting and auditing companies must establish a partnership with an Omani company to practice auditing.
Accounting News

Tax Rates

Consumption Taxes

Nature of the Tax: Oman recently introduced a value-added tax (VAT), along with other Gulf Cooperation Council (GCC) member countries. The implementation date was April 2021.
Tax Rate: 5%
Reduced Tax Rate: Zero-rated items include exports of goods and services; supply of certain basic foodstuff; supply of medicine and medical equipment; supply of investment gold, silver and platinum; supply of international transport of goods and passengers and related services; supply of sea, air and land means of transport for transport of goods and passengers for commercial purposes, and related goods and services; supply of rescue aircraft, rescue boats and auxiliary ships; and supply of crude oil and its oil derivatives and natural gas.
The categories of exempt supplies of goods and services are financial services; provision of healthcare and associated goods and services; provision of education and associated goods and services; supply of local passenger transport; supply of bare land; resale of residential real estate; the renting of real estate for residential purposes.
Other Consumption Taxes: Starting from June 2019, Oman levies excise duties on tobacco products, alcoholic beverages, and energy drinks (at 100%) as well as on carbonated drinks (50%).

Corporate Taxes

Company Tax: 15%
Tax Rate For Foreign Companies: Omani companies are taxed on their worldwide income, with a foreign tax credit granted for certain taxes paid overseas. Foreign companies are taxed on their Oman-source income.
Branches of foreign entities are taxed at 15%.
Capital Gains Taxation: Capital gains are taxed at the same rate as ordinary income. Gains from the sale of locally listed shares are exempt from tax.
Main Allowable Deductions and Tax Credits: Depreciation is provided on a straight-line basis on a wide range of assets at rates varying between 4% and 100%. A "pooling" concept is allowed, whereby assets subject to the same rate of depreciation may be pooled together for purposes of depreciation. Goodwill is also amortizable for tax purposes.
Start-up expenses are allowed as a deduction in the first taxable year. Interest expense is allowed for loans from unrelated parties or on loans from banks, as well as on expenses incurred for the purpose of earning income.
Charitable contributions are deductible up to 5% of gross income. Bad debts can be deducted at the time of write-off.
All expenses incurred for the generation of gross total income are allowed, including entertainment costs (without any limits). Social security contributions are also deductible.
Sponsorship fees paid to Omani sponsors are restricted to 5% of net taxable income before sponsorship fees. Net taxable income is determined after offsetting any losses carried forward. Charges or expenses allocated from the head office or other group companies are limited to 3% of gross income (5% for banks and insurance companies, and 10% for high-tech industrial activities). Commissions paid by insurance companies are restricted to 25% of net premiums collected.
Fines, penalties and taxes are not tax-deductible.
Net operating losses can be carried forward and set off against taxable income for five years. Carryback of losses is not permitted.
Other Corporate Taxes: The total monthly social security and insurance contributions to be made by the employer equal to 11.5% of the salary (10.5% social security, 1% insurance for work-related injuries). This contribution system applies only to Omani citizens and other employees from the Gulf Cooperation Council area. Furthermore, from January 2021, employers and Omani employees are each required to make a monthly salary contribution at the rate of OMR 1 per OMR 100 of monthly salary (or 1% of payment) as part of the job security scheme.
Municipal taxes apply to various services at the following rates: 3% on property rents, 5% on hotel occupancy, 10% on leisure and cinema houses.
Stamp duty of 3% is applicable to the transfer of land and property.
Other Domestic Resources: Tax Authority; Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

	Oman	Middle East & North Africa	United States	Germany
Number of Payments of Taxes per Year	15.0	20.8	10.6	9.0
Time Taken For Administrative Formalities (Hours)	68.0	204.0	175.0	218.0
Total Share of Taxes (% of Profit)	27.4	32.1	36.6	48.8

Source: Doing Business - Latest available data.

Individual Taxes

Tax Rate

No Individual Tax

Allowable Deductions and Tax Credits: Non applicable - There is no individual income tax in Oman.
Special Expatriate Tax Regime: Non applicable - There is no individual income tax in Oman.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: List of double tax agreements signed by the Sultanate of Oman
Withholding Taxes: Dividends: 0%, Interests: 0%, Royalties: 0% (residents)/10% (non-residents)
Bilateral Agreement: Oman and Mauritius concluded a Double Taxation Agreement.

Sources of Fiscal Information

Tax Authorities: Overview of Oman's tax measures in response to Covid-19
Oman Tax Authority
Other Domestic Resources: Tax guide of the Secretary General of Taxation
Directorate General of Customs

Intellectual Property

National Organisations: Intellectual Property Department, within the Ministry of Commerce and Industry.
Regional Organisations: Oman is a member of the Patent Office of Cooperation Council for the Arab States of the Gulf (GCC).

Legal Framework

Independence of Justice: Articles 59, 60 and 61 of the Constitution guarantees the rule of Law, the impartiality of the Judge, the independence of the judiciary and the prohibition of any interference in a law suit or in the matters of justice. However, the Sultan issues all the judicial appointments.
Equal Treatment of Nationals and Foreigners: The law provides for the right to a fair trial regardless of national origin; however, some foreign embassies report cases of violations of these rights, particularly for migrant workers.
The Language of Justice: Arabic is the official language of the state and the judicial system.
Recourse to an Interpreter: It is possible to have an interpreter in Oman; however, the government does not uniformly provide language interpretation for non-Arabic speakers.
Sources of the Law and Legal Similarities: The Omani judicial system consists of two types of legislation: the primary and secondary legislation. Primary legislation can only be promulgated by the Sultan, and is known as the Royal Decree. Secondary legislation is enacted pursuant to ministerial decisions according to specific powers delegated by the Royal Decrees to the concerned executive or ministerial body. The legal system itself is a combination of the Anglo-Saxon law and the Islamic law. Islam is the State religion and the Islamic Sharia is the basis of legislation (article 2 of the Constitution).
Checking National Laws Online: Judicial laws issued by the Sultanate of Oman

Standards

National Standards Organisations: DGSM, Directorate General for Specifications and Measurements (within the Ministry of Commerce and Industry)
Integration in the International Standards Network: Directorate General for Specifications and Measurements (DGSM) is a member of the International Organization for Standardization (ISO), GCC Standardization Organization (GSO) and the Standards and Metrology Institute for the Islamic Countries (SMIIC). Oman is also a member International Electrotechnical Commission (IEC).
Classification of Standards: OS
Online Consultation of Standards: The publication of national standards is entrusted to the Directorate General for Specifications and Measurements (DGSM), within the Ministry of Commerce and Industry.
Certification Organisations: DGSM Directorate General for Specifications and Measurements (DGSM) (Oman does not have a separate accreditation body)

Business Practices

General Information
Opening Hours and Days: The typical working week is Sunday through Thursday. Business hours in the private sector are typically 8:00 AM- 1:00 PM and 2:00 PM- 6:00 PM. Shops usually open from 9:00 AM to 1:00 PM and then from 4:00 PM to 10 or 11 PM, seven days a week, except Fridays, when they open after 4:00 PM. Government offices and most businesses have shortened hours during the month of Ramadan.

Public Holidays

New Year's Day	January 1
Prophet's Ascension Day	Varies, follows lunar calendar
Eid al-Fitr	Varies, follows lunar calendar
Renaissance Day	July 23
Eid al-Adha	Varies, follows lunar calendar
Islamic New Year	Varies, follows lunar calendar
National Day	November 18
Birthday of Sultan Qaboos	November 19
Birthday of the Prophet	Varies, follows lunar calendar

Holiday Compensation: There is no compensation day holidays falling on a weekend.

Periods When Companies Usually Close

Eid al-Fitr	4 days
Eid al-Adha	4 days

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