Oman Tax & Business Guide - Deloitte

Basic facts
Population 2.6m Inflation 3.2% (2006)*
Main languages Arabic, English GDP per head US$13,870*
Currency Omani rial (OMR) GDP growth 6.6% (2006)*
Economic communities WTO, Gulf Co-operation Council (GCC)
GDP sources 2.3% agriculture, 39.1% industry, 58.6% services
*Economist Intelligence Unit estimates.
Political environment

The Sultanate of Oman is a monarchy. The Council of Oman debates policy but does not legislate. It comprises the 83-member Majlis al-Shura (Consultative Council), elected by universal suffrage in 2003Ûthe next election is in October 2007Ûand the Majlis al-Dawla (State Council), whose members were appointed in late 2003.

The sultan, Qaboos bin Said al-Said, is head of state.
Foreign trade and investment
Exports US$21.2bn (2006)* Imports US$9.9bn (2006)*
*Economist Intelligence Unit estimates.

Leading export markets: China, Korea and Japan.

Major exports: Oil, liquefied natural gas and locally manufactured chemical products.

Oil accounts for nearly 49% of GDP.
Business and financing
Business forms Limited liability company, joint stock company, branch

Other forms of business include a general partnership, limited partnership, holding company and joint venture.

In general, foreigners may only own up to 70% of an Omani-registered company, but under certain circumstances 100% foreign ownership is permitted.
Labour environment
Unemployment rate N/a Minimum wage OMR 120 (monthly)

In accordance with the Ministry of Manpower Guidelines, the minimum wage for Omani nationals is OMR 120 per month. An additional transport allowance of OMR 20 is required where transport is not supplied.
Taxation
Corporate tax
Main rate CompaniesÛmarginal rates to 12%; BranchesÛprogressive rates to 30%

Corporate tax is charged only on income sourced in Oman. Companies incorporated in Oman are taxed at 0% for income up to OMR 30,000 and at a flat rate of 12% for income above OMR 30,000. The tax on branches of foreign companies is levied at rates ranging from nil on profits up to OMR 5,000 to 30% on profits of OMR 100,001 and above.

Dividend income is treated as exempt income.
Individual tax
Income of individuals is not taxed

There is no taxation on the income of individuals.
Capital gains
Company gains taxed as income

Capital gains of companies are included in taxable income and taxed at the normal rates. Gains of individuals are not taxed.
Indirect tax
No consumption taxes

There are no consumption taxes or value-added tax (VAT) in Oman.
Tax administration and compliance
Tax year Corporations: calendar year; Individuals: not taxed

Companies must file a provisional tax return by the end of the third month following the accounting year-end, together with payment of the estimated tax. An annual return of income is to be filed by the end of the sixth month following the end of the accounting year, together with the balance of tax due. In some cases, an extension of the filing or payment date may be obtained.
Additional tax information
Withholding taxes Withholding taxes applies to royalties, management fees, hire charges for equipment and machinery, technical know-how and research and development (R&D) at 10%.
Tax treaties Oman has concluded more than 20 tax treaties.
Dividends Dividends are not taxable.
Revenue protection There is no transfer-pricing or anti-haven (CFC) legislation.
Groups There is no provision for group taxation.
Incentives Tax holidays.
Other taxes Municipal taxes; Hotels and Restaurant services are subject to 17% tax comprising municipal tax of 5%, service charge of 8% and tourism tax of 4%.