Oman operates a relatively simple taxation system with no income tax for individuals. However, businesses are subject to corporate income tax, and there are other taxes that expats need to be aware of when living and working in Oman. In this article, we will explain how the taxation system works in Oman and what expats need to know about taxes in the country.
Double Taxation Agreements
Oman has signed double taxation agreements with several countries, including the United Kingdom, France, and India. These agreements aim to avoid double taxation on income earned in both Oman and the other country. They also provide relief from withholding taxes on dividends, interest, and royalties.
Main Taxes for Expats
Corporate Income Tax
Businesses operating in Oman are subject to corporate income tax on their profits. The standard corporate income tax rate is 15%, but some industries, such as oil and gas, have a higher rate of 55%.
Withholding Tax
Oman imposes withholding tax on certain types of income paid to non-residents. The withholding tax rates vary depending on the type of income and can range from 5% to 10%.
Excise Tax
Excise tax is a tax on specific goods that are harmful to human health or the environment. In Oman, excise tax is levied on tobacco, energy drinks, and soft drinks. The excise tax rates range from 50% to 100%.
Special Tax Breaks for Expats
Oman does not have any specific tax breaks for expats. However, individuals who are not resident in Oman are not subject to income tax on their foreign income.
Filing a Tax Return in Oman
As mentioned earlier, Oman does not have an income tax system for individuals, so expats are not required to file a tax return. However, businesses are required to file a tax return each year and pay any corporate income tax due.
Tax Exit Procedures
Expats who are leaving Oman to move abroad need to follow certain tax exit procedures. Firstly, they need to notify the relevant authorities of their departure and provide details of their new address abroad. They should also settle any outstanding tax liabilities before leaving Oman.
The taxation system in Oman is relatively simple, with no income tax for individuals. However, businesses are subject to corporate income tax, and there are other taxes, such as withholding tax and excise tax, that expats need to be aware of when living and working in Oman. Expats who are leaving Oman to move abroad should follow the tax exit procedures and settle any outstanding tax liabilities before leaving the country. By understanding the taxation system in Oman, expats can ensure they are complying with their tax obligations and avoiding any penalties or fines.