Tax overview
The Oman tax system for businesses
Oman's tax system is straightforward compared with many countries, but it is developing quickly. This overview covers every tax a company in Oman should know about.
Last reviewed 13 October 2026Free first consultation · reply within one business day
Summary of taxes
| Tax | Rate | Applies to |
|---|---|---|
| Corporate income tax | 15%; 3% for qualifying small companies | Companies and permanent establishments |
| Withholding tax | 10% | Certain payments to non-residents, such as royalties and service fees |
| VAT | 5% (zero-rated and exempt supplies exist) | Businesses above OMR 38,500 of taxable supplies |
| Excise tax | 50% or 100% | Tobacco, energy drinks, carbonated and sweetened drinks, pork and alcohol |
| Customs duty | Usually 5% GCC common tariff | Imports from outside the GCC |
| Personal income tax | 5% from 2028 | Individuals with annual income above OMR 42,000 |
Corporate income tax
Companies pay 15% on taxable profit. A 3% rate applies to small companies that meet conditions on capital, gross income, number of employees and other criteria. Returns are due within four months of year-end, supported by audited financial statements where required. Free zone and incentive regimes can grant exemptions. Details: corporate tax services.
Withholding tax
Omani payers must withhold 10% on certain payments to non-residents without a permanent establishment in Oman, such as royalties, consideration for research and development, use of computer software, and management fees. Relief may be available under Oman's double tax treaties.
VAT
Introduced on 16 April 2021 at 5%. Registration is mandatory above OMR 38,500 of annual taxable supplies, and voluntary above OMR 19,250. Returns are usually quarterly. A national e-invoicing system is being phased in. Details: VAT registration and filing.
Personal income tax from 2028
Oman has legislated a personal income tax of 5% on individuals whose annual gross income exceeds OMR 42,000, effective from 1 January 2028. It is expected to affect only the highest earners, but founders and senior staff should plan salary and dividend structures ahead of the change.
Capital gains, dividends and transfer pricing
- There is no separate capital gains tax; gains realised by companies form part of taxable income.
- Dividends: withholding tax on dividends and interest paid to non-residents has been suspended under recent measures. Confirm the current position before making a distribution.
- Transfer pricing: transactions between related parties should be at arm's length.
Tax obligations by stage of your company
| Stage | Tax steps |
|---|---|
| After registration | Register with the Oman Tax Authority and obtain the tax card |
| When turnover grows | Register for VAT above OMR 38,500 of taxable supplies |
| Paying foreign suppliers | Check withholding tax on royalties, services and similar payments |
| After year-end | Financial statements, audit where required, annual corporate tax return within four months |
| Ongoing | Keep records, respond to assessments, update registrations |
Free zone tax position
Companies in free zones and special economic zones may receive income-tax holidays for qualifying projects under their zone's rules and approvals. They still register with the Tax Authority and follow VAT rules, with special treatment for certain supplies in designated zones.
Common mistakes
- Registering for tax late, then missing the first return.
- Ignoring withholding tax on payments to foreign service providers.
- Filing a tax return that doesn't match audited accounts.
- Missing VAT registration after crossing the threshold.
How we help
Our accounting and tax team registers you, keeps your books, files VAT and corporate tax, and advises on withholding tax and incentives. See accounting and bookkeeping and how to get a tax card.
Frequently asked questions
Does Oman have income tax?
Companies pay corporate income tax at 15% (3% for qualifying small companies). Individuals currently pay no income tax; a 5% tax on income above OMR 42,000 a year starts in 2028.
What is the VAT rate in Oman?
5%, with zero-rating for items such as exports and many basic foods, and exemptions for certain financial services and residential property.
Does Oman have double tax treaties?
Yes. Oman has a network of double tax treaties that can reduce withholding tax and prevent double taxation.
Next steps
Related services and guides
- 01Corporate TaxCorporate income tax in Oman explained, and how we help: 15% and 3% rates, tax registration, annual returns, withholding tax, deadlines and penalties.
- 02VAT RegistrationVAT in Oman: 5% rate, OMR 38,500 mandatory registration threshold, voluntary registration, quarterly returns, zero-rated supplies, e-invoicing and our VAT services.
- 03Accounting & BookkeepingOutsourced accounting and bookkeeping in Oman: IFRS accounts, monthly bookkeeping, payroll entries, management reports, audit coordination and tax-ready records.
- 04Omanisation RulesWhat Omanisation means for your company: sector targets, jobs reserved for Omanis, work permit impacts, free zone rules, compliance reporting and practical tips.
- 05Oman vs UAEOman vs UAE for setting up a company: ownership, corporate tax, VAT, personal tax, costs, free zones, visas, banking and market size compared side by side.
- 06Vision 2040 OpportunitiesBusiness opportunities under Oman Vision 2040: logistics, manufacturing, tourism, mining, fisheries, green hydrogen, technology and In-Country Value.
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