Tax Figures
Corporate Income Tax
Corporate taxation in Oman does not define residency as the determinant of corporate taxes. If a foreign company has provided services in Oman for 90 days or more in a 12 month period, or has a dependent agent in Oman, it is considered a permanent establishment and is subject to corporate taxation for the Oman-source income.
Corporate Income Tax is 12% applying to all businesses, branches and permanent establishments of any foreign company with taxable income exceeding OMR 30,000. Exclusions apply to petroleum industries.
Income Tax Rate
There is no personal income tax in Oman.
Payroll Tax
There is no payroll tax in Oman.
Sales Tax
There is no sales tax in Oman.
Withholding Tax
Oman does not levy withholding taxes on dividends or interest.
There is a 10% withholding tax applied at source to payments for royalties and management fees. This tax applies to companies without a permanent establishment in Oman.
Other Tax
- Customs Duty: A customs duty of 5% of cost, insurance and freight value applies to most non-GCC source goods.
- Stamp Duty: A stamp duty of 3% applies to the transfer of land and property.
- Municipal Taxes: Local taxes are levied for certain activities like hotel income, property rents and leisure income.
Time to prepare and Pay Taxes
68 hours
Employers Social Security and statutory contributions
Companies are required to pay 11.5% of the employee’s gross salary as social security contributions including a 1% payment for work related injuries. The withholding obligation lies with the employer.
The social security system of Oman is under a unified system of insurance protection coverage for Gulf Cooperation Council (GCC) members that cover workers in all GCC countries.
Employees Social Security and statutory contributions
Employees who are Omani nationals are subject to social security contributions, levied at 18.5% of the employee’s gross salary. Only 7% of this contribution is payable by the employee.
Employees who are foreign nationals are not subject to social security payments.
Payroll
Remote Payroll
A remote payroll in Oman is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Oman. This applies to both local and foreign employees. One option for a non-resident company to payroll its employees (local and foreign) in Oman is to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf.
Local Payroll Administration
In some cases, a company will register their business in Oman under one of the forms available but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll
Larger companies with a commitment to Oman may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete the incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Omani payroll and can fulfil all tax, withholding tax and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Oman employment laws.
Currency
Omani Rial (OMR)
