17 May 2019
OMAN: Changes to Income Tax Regulations
The long-awaited income tax law amendments came into effect on 11 February 2019.
The amendments were a clarification of the changes made in February 2017 that applied 10% withholding tax (WHT) on payments to foreign persons for the performance of services, as well as to dividends and interest. There was previously no WHT for these categories.
The new rules specify categories of payments that are not considered to be service payments subject to WHT. These include payments in relation to participation in organisations, conferences, seminars or exhibitions; training; freight charges and associated insurance; air tickets and accommodation costs abroad; meetings of boards of directors; reinsurance payments; and any services provided that are linked to a business or property located outside of Oman.
The rules also clarify that only dividends distributed to foreign shareholders by Omani joint-stock companies are subject to WHT, while profit distributions from Omani limited liability companies to foreign partners are not.
A number of administrative procedures and electronic filing requirements were also introduced, including information to be shared by government bodies, new forms for taxpayers and an e-portal for submitting declarations of income and accounts.
Amendments also establish tighter conditions and procedures for claiming a tax exemption, including minimum investment levels for fixed assets and maintaining the required percentage of Omani employees.