Oman corporate tax - guide for international expansion

Setting up a business in Oman? Understanding the corporate tax landscape is crucial for your company's success and compliance. The Sultanate of Oman has undergone significant tax reforms in recent years, introducing new regulations that affect both local and international businesses.

Whether you're expanding into the Middle Eastern market or establishing your first venture in Oman, knowing your tax obligations will help you make informed decisions. Wise Business can help streamline your international payments and currency management as you navigate Oman's business environment.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Oman Corporate tax rate in 2025

The standard corporate income tax rate in Oman is 15% for most companies, as established under the Income Tax Law issued by Royal Decree No. 28/2009 and maintained through subsequent amendments. This rate applies to all taxable income earned by Omani entities and foreign companies operating through permanent establishments in the country.¹

A reduced rate of 3% may apply to small taxpayers that meet specific criteria related to capital, turnover, and number of employees, offering targeted support for micro and small enterprises. In contrast, companies engaged in oil and gas exploration or production are subject to a higher rate of 55% on income derived from petroleum operations, reflecting the strategic role of this sector in Oman's economy.¹

Foreign entities are taxed on profits arising from business activities conducted within Oman's borders, including income from services performed, goods sold, or assets utilized in the Sultanate. The country has also introduced a supplementary tax regime aligned with the OECD’s Pillar Two framework, ensuring that multinational groups meeting the global threshold maintain an effective tax rate of at least 15% in Oman.¹

Read more about Corporate Tax Planning best practices

How to pay corporate tax in Oman

Corporate tax payments in Oman are made in Omani Rials (OMR) through the Tax Authority’s (OTA) electronic portal, which enables authorized taxpayers to file returns, settle tax liabilities, and manage compliance online.²

For tax years beginning on or after 1 January 2020, companies are required to submit a single “Return of Income” within four months after the end of their financial year. Under this regime, filing and payment coincide; the tax due must be paid at the time of submission.³

If a taxpayer fails to pay the tax by the due date, an additional tax (interest) of 1% per month (or part thereof) is due on the outstanding balance from the original due date until full payment.³

Late filing of the income tax return may result in penalties, subject to a maximum limit of OMR 2,000.⁴

Under certain conditions and with OTA approval, taxpayers may be permitted to pay their tax in instalments, but the law does not explicitly prescribe a fixed advance payment regime (e.g., threshold of OMR 500 or fixed instalment months).³

Finally, the OTA (through the law) has the authority to assess additional penalties (e.g., for underreporting or incorrect returns in the range of 1 % to 25 % on discrepancies) and sequester assets to enforce tax collection.³

Let's calculate the tax liability for a company with an annual turnover of OMR 577,000 (equivalent to approximately £1.5 million). Assuming a profit margin of 10%, the taxable profit would be OMR 57,700.

At Oman's standard corporate tax rate of 15%, the tax owed would be:

OMR 57,700 × 15% = OMR 8,655

When expanding your business to Oman, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Oman

A few helpful tips to keep your company fully compliant with the Omani tax regulations:

• Register for taxes early: All entities subject to corporate tax in Oman must register with the Oman Tax Authority by submitting the tax registration form and supporting documents. Timely registration avoids penalties and ensures smooth handling of your corporate tax bill.
• File accurate returns: Companies must submit annual tax returns within six months of their fiscal year-end. Returns should include audited financial statements, taxable income, and tax payable. VAT returns are filed quarterly (or monthly for some businesses) through the Tax Authority’s online portal, and invoices must be VAT-compliant.⁵
• Comply with accounting and payroll laws: Financial statements must follow IFRS, and records should be preserved for ten years. Employers must also comply with the Wages Protection System by paying employees via bank transfer in OMR.⁶
• Stay ahead: Oman enforces withholding tax on payments to non-residents. To avoid penalties, businesses often use corporate tax outsourcing services for efficiency, especially given that Oman’s petroleum sector faces one of the highest corporate tax rates in the world.

International Expansion to Oman

Oman is positioned at the gateway of the Arabian Sea and the Indian Ocean.⁷ This makes it one of the most strategically located countries in the Gulf. Its 3,165 km coastline connects global shipping routes, giving businesses unmatched access to international markets. Within an eight-hour flight, companies can reach 60% of the world’s population, positioning Oman as a natural hub for trade and logistics.⁸

Interestingly, the country has built its reputation on political stability, forward-looking regulations, and a secure business environment.⁷ The Omani rial is one of the strongest global currencies and is pegged to the US dollar, ensuring financial stability for investors. Oman also ranks 5th globally for safety and 1st in Asia for quality of life, creating an attractive environment for both businesses and expatriates.⁸

Moreover, Oman carries several advantages for international investors. Companies benefit from a relatively low corporate tax rate of 15%, no personal income tax, and 100% foreign ownership in many sectors.⁹ The government has also introduced incentives such as long-term residency visas and exemptions in free zones, boosting the appeal for foreign companies.¹⁰ Capital, profit repatriation, and dividends face no restrictions, which adds to the ease of doing business.

The workforce is another strength. Oman has a literacy rate of nearly 98%, and 70% of graduates are trained in STEM fields, providing a pool of skilled talent. Infrastructure ranks first in the Middle East for port development, and mobile coverage for 4G and 5G networks reaches 99%, supporting both logistics and digital growth.⁸

Oman’s Vision 2040 strategy is shifting the economy beyond oil into logistics, manufacturing, fisheries, ICT, renewable energy, and tourism.¹¹ For businesses seeking growth in a forward-looking market, Oman combines stability, opportunity, and connectivity.

The steps to start a business in Oman are as follows:¹²

1. Conduct market research to understand your sector and customers.
2. Prepare a detailed business plan.
3. Choose your business location, structure, and name.
4. Register your company with the Ministry of Commerce, Industry, and Investment Promotion (MOCIIP).
5. Complete additional registrations, such as VAT or sector-specific licenses, if required.
6. Register with the Oman Chamber of Commerce and Industry (OCCI) to receive your membership certificate.
7. Open a local bank account to manage your finances.

In short, Oman is not only open for business. It is prepared to be a partner in your long-term growth. All it asks for is knowing the core elements like primary payment methods and business expansion tricks to reach your corporate targets.

Discover the top 5 best Corporate Tax softwares

Incorporation of Business in Oman

To incorporate a company in Oman, you’ll need to register through the Ministry of Commerce, Industry, and Investment Promotion (MOCIIP) using its Invest Easy portal. Further, you need the following information and documents to complete incorporation:¹³

• Company name: a unique name for your business in Oman.
• Legal guardian consent: required if a shareholder or partner is under 18 years old.
• No Objection Certificate (NOC): expatriates with a residence visa must provide written approval from their sponsor or employer to participate as a shareholder or manager.
• Passport copy: mandatory for foreign shareholders, directors, or authorized signatories.
• Board resolution: if an existing Omani company is investing, minutes of a board meeting must authorize the investment and appoint a representative.
• Foreign company documents: including a commercial registration certificate, Articles of Association, and minutes of a board meeting authorizing investment in Oman.
• Authorized signatory passport: proof of identity for the person signing the incorporation documents on behalf of the company.
• Project description: required if the entity is subject to foreign investment rules. It should cover the business activity, location, capital, employment plan, and expected economic benefits.

Business Entities in Oman

The Oman Commercial Companies Law defines several entity type:^{14 15}

• Limited Liability Company (LLC): The most common structure, suitable for small and medium enterprises. An LLC requires two to fifty members. Liability is limited to each shareholder’s contribution. This entity can either be an Omani LLC (requiring a local partner) or a wholly foreign-owned LLC with higher capital requirements.
• Sole Proprietorship: Allows one person to own and operate the business. It is flexible and simple to set up, but it does not provide a separate legal identity, so the owner assumes full liability.
• Partnership Firm: Involves collaboration with at least one Omani partner. General partnerships share liability equally, whereas limited partnerships restrict liability for some partners to their invested capital.
• Joint Stock Company (SAO): Suitable for larger businesses seeking to raise capital. Closed joint stock companies (SAOC) require at least three shareholders, while public joint stock companies (SAOG) can list on the stock exchange and raise funds from the public.
• Holding Company: Typically established to own shares in other companies and manage group structures.

Entrepreneurs must also consider compliance requirements such as corporate governance, sector approvals, and timely tax filings. Many companies engage a corporate tax associate to navigate Oman's corporate tax policy and identify opportunities for corporate tax credits. In some cases, applying for a corporate tax extension becomes necessary to meet deadlines.

International corporate tax best practices

Managing corporate tax obligations across multiple jurisdictions requires strategic planning and adherence to international standards. Companies operating in Oman and other countries should implement robust compliance frameworks to avoid penalties and optimise their tax positions.

Maintain comprehensive documentation of all business transactions, transfer pricing policies, and intercompany agreements. Oman's tax authorities may request detailed records during audits, and having organised documentation readily available can significantly reduce compliance risks and associated costs.

Stay updated with Oman's evolving tax landscape, particularly regarding the implementation of international tax reforms. The country has committed to various OECD initiatives, including the Base Erosion and Profit Shifting (BEPS) framework, which may introduce new reporting requirements and anti-avoidance measures.

Consider the impact of double taxation agreements (DTAs) when structuring international operations. Oman has signed DTAs with over 30 countries, which can provide relief from double taxation on income earned across borders and reduce withholding tax rates on dividends, royalties, and interest payments.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Oman efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Oman

Who is liable for corporate tax in Oman?

All companies incorporated in Oman are liable for corporate tax on their worldwide income. Foreign companies with permanent establishments in Oman are taxed only on their Omani-source income.

Are there any tax incentives for businesses in Oman?

Yes, Oman offers several tax incentives to encourage investment and economic diversification. Companies operating in designated free zones may benefit from tax holidays of up to 30 years. Manufacturing companies can receive tax exemptions for up to 10 years, while tourism and agriculture projects may qualify for 5-year exemptions. Additionally, companies investing in less developed governorates can receive enhanced incentives.

What is the tax treatment of dividends in Oman?

Dividends paid by Omani companies to resident shareholders are generally exempt from tax at the recipient level, avoiding double taxation. However, dividends paid to non-resident shareholders may be subject to withholding tax at rates ranging from 0% to 10%, depending on applicable double taxation agreements.

What is the process for registering for corporate tax in Oman?

Companies must register with the Tax Authority of the Sultanate of Oman within 30 days of commencing business activities or within 30 days of incorporation, whichever is earlier. Registration is completed through the authority's online portal, requiring submission of commercial registration documents, memorandum and articles of association, and details of business activities.

What are the common pitfalls to avoid regarding corporate tax in Oman?

Common mistakes include failing to register within the required timeframe, inadequate record-keeping, missing advance tax payment deadlines, and incorrectly calculating taxable income. Companies should also ensure proper classification of expenses and maintain arm's length pricing for related party transactions. Regular consultation with local tax advisors can help avoid these costly errors.

Sources used in this article:

1. PwC Tax Summaries: Oman Taxes on Corporate Income
2. Oman Tax Portal (Official)
3. PwC Tax Summaries: Oman Tax Administration
4. Dentons: Global Tax Guide to Doing Business in Oman
5. PwC: Doing Business in Oman Guide (PDF)
6. Wafeq Business Hub: Tax Types in Oman
7. Investasian: Oman Country Guide
8. Invest Oman: Why Oman
9. International Bar Association (IBA): Foreign Investment in Oman
10. Vista Oman: Investment Opportunities
11. Kraker Invest: Why Invest in Oman—A Compelling Opportunity in 2025
12. Commitbiz: Company Registration in Oman
13. Global Investor Services: Guide to Company Registration
14. Oman Business Setup: Oman Commercial Companies Law
15. Commitbiz: Types of Business Entities in Oman

Sources last checked 06/10/2025