Oman taxes company profits at 15%. Small enterprises that meet four conditions pay 3% instead. There is no tax-free slice below either rate — the OMR 30,000 exemption that older articles mention was abolished in 2017.
Which side of the line are you on?
The Oman Tax Authority publishes both rates on its own tax rates page: 15% of net taxable income for institutions and commercial companies, and 3% for small enterprises meeting specified conditions. Those are the only two general corporate rates. Petroleum exploration is taxed separately at 55%.
This matters more than the headline difference suggests. The 3% band is not a partial relief applied to the first slice of profit — it is a rate applied to the whole of your taxable income. A company just inside the line pays a fifth of what a company just outside it pays on the same profit.
The four conditions for the 3% rate
The Tax Authority's own income tax FAQs, in both the English and Arabic versions, state that all four of the following must be met:
- Registered capital does not exceed OMR 60,000
- Annual gross income does not exceed OMR 150,000
- The workforce does not exceed 25 workers
- The activity is not a professional or occupational one
PwC, reviewing Oman on 7 July 2026, gives the same three numeric conditions and adds two things the Tax Authority does not publish: that the rate is confined to Omani proprietorships (establishments) and LLCs, and a fuller list of excluded activities — air and sea transport, extraction of natural resources, banking, insurance and financial services, public utility concessions, and anything else designated by ministerial decision. That list is secondary. No Omani government page publishes it.
When the small-enterprise regime was created by Royal Decree 9/2017, the thresholds were registered capital of OMR 50,000, gross income of OMR 100,000, and 15 employees. Several current consultancy pages still print those figures.
They are not inventing them — they are simply out of date. But here is the honest limit of our own research: we could not identify the instrument that raised the thresholds to 60,000 / 150,000 / 25. Commentators on Ministry Decision 14/2019 note that it revised the small-taxpayer criteria without stating the new numbers, and we could not read the Arabic text of that decision. So rely on the Tax Authority's live FAQ figures, and do not let anyone cite you a decree number for them, because we could not find one.
The Omani-participation conditions: three sources, three answers
There is a second set of conditions involving Omani owners and Omani employees, and the sources genuinely disagree about what those conditions buy you.
- The Tax Authority's Arabic FAQ attaches them to a full exemption: the four conditions above, plus either the owner or partner working full time managing the enterprise, or the enterprise employing two Omani citizens for not less than six months.
- Curtis, Mallet-Prevost's Oman Law Blog, writing on Ministry Decision 14/2019, attaches essentially the same requirements to the 3% rate itself — the Omani owner or partner must be actively and exclusively engaged in the business, and the business must employ at least two Omani nationals with proof of at least six months.
- Moore Global describes a 0% rate available where at least two owners or partners working full time are Omani.
We are not going to resolve this for you, because we cannot. One official source and two secondary sources describe overlapping conditions attached to different outcomes. If you are close to qualifying, this is worth a direct written question to the Tax Authority rather than a decision based on any published guide, including this one.
The governing law
- Royal Decree 28/2009 promulgated the Income Tax Law, issued 24 May 2009, published in Official Gazette 888 on 1 June 2009. It is still the governing corporate statute.
- Royal Decree 9/2017, issued 19 February 2017, Official Gazette 1183 of 26 February 2017, raised the headline rate from 12% to 15%, removed the OMR 30,000 exempt slice, and created the small-enterprise regime.
- Royal Decree 118/2020 added tax residency at Article 18 bis and the international information-exchange machinery. It changed no rates and no thresholds.
- Royal Decree 70/2024 introduced the top-up tax on multinational groups, dealt with separately below.
The Executive Regulations currently in force are Ministry Decision 14/2019 — the Tax Authority's own law-and-regulations index identifies it as the operative text. One trap: the English-language executive regulation PDF still hosted on that same portal is the superseded Decision 30/2012 version from January 2012. Its thresholds of OMR 20,000 capital, OMR 100,000 gross income and 8 employees are pre-2017 filing and notification exemptions, not the 3% rate conditions. There is no current English executive regulation.
Tax Authority Decision 180/2026, published on 20 July 2026, adds a new Article 18 bis to the Executive Regulations governing when a business expense is deductible: it must be necessary for the activity, it must have regulatory approval, and it must not arise from a breach of a legal or regulatory obligation. Deduction is permitted only where authorised by the Chairman of the Tax Authority.
It takes effect from the tax year beginning 1 January 2027, so it does not affect your 2026 return. The decree.om record confirms the decision and its date; the substantive description of Article 18 bis comes from press reporting, as the full text is behind a subscription wall.
Registration, and the 60-day deadline
The Tax Authority's registration page states the rule plainly: any establishment carrying on economic activity in Oman must register within a period not exceeding 60 days from the date of commencement of activity, or from the date of registration with the Ministry of Commerce, Industry and Investment Promotion. Registration is through the Tax Authority's electronic portal, and produces a tax file number.
The FAQ adds a point that catches people out: all holders of a commercial registration must register for income tax, whatever the CR grade, and even if the business is loss-making or has no profits at all. Registration is not triggered by profitability. Dormant and pre-revenue companies register too.
Filing, payment and penalties
| Obligation | Deadline | Source |
|---|---|---|
| Return — taxpayers on the 3% rate | Within 3 months of the end of the tax year | Tax Authority FAQ, official |
| Return — taxpayers on the 15% rate | Within 4 months of the end of the tax year | Tax Authority FAQ, official |
| Payment of tax due | With the return, within 4 months of year end | PwC, secondary |
| Withholding tax on payments to non-residents | By the fourteenth day of the month following payment or crediting | Tax Authority FAQ, official |
The tax year is the calendar year. PwC adds that an alternative year-end is possible with Tax Authority approval and that a first tax year may run up to 18 months, neither of which we could confirm on a government page. One further thing we cannot settle: whether a separate provisional return still exists. PwC describes a single return of income within four months and mentions no provisional filing. But the Tax Authority's own e-services index still lists Provisional Returns of Income as a live service, separately from Final Returns of Income, and the 2012 regulations provided for one on Income Tax Form No. 12. If your accountant files a provisional return, do not assume they are working from stale guidance.
Penalties
- Late or failed submission of the return — an administrative penalty of not less than OMR 100 and not more than OMR 2,000. Tax Authority FAQ, confirmed independently by PwC and Deloitte.
- Late payment — additional tax at 1% per month of the unpaid amount, from the due date to the date of payment. Tax Authority FAQ.
- Other non-compliance — Moore Global reports a range of OMR 100 to OMR 50,000 depending on the violation. We found no official confirmation of the upper figure.
Note that the 1% monthly charge runs on the tax, not on the penalty, and it does not stop while an assessment is disputed. On a modest liability the filing penalty is the smaller problem; on a large one, the monthly accrual is what hurts.
Losses
Losses may be carried forward for five years from the end of the tax year in which they were incurred, under Article 71 of the Income Tax Law. There is no carry-back.
The treatment of losses arising during an exemption period is contested. Deloitte states that losses from an exemption period, and losses incurred in 2020, may be carried forward indefinitely. Moore Global states that losses from tax-exempt activities cannot be carried forward at all. Both are secondary, they contradict each other directly, and we found nothing official either way.
Branches and permanent establishments
A foreign company does not need a subsidiary to become taxable in Oman. Article 2 of the Income Tax Law defines a permanent establishment as a fixed place of business in Oman through which a foreign person wholly or partly carries on business.
- Branches, offices and factories
- A construction site exceeding 90 days
- A services presence — KPMG describes a PE arising where a non-resident's employees are present in Oman for more than 90 days in any 12-month period
Branches of foreign companies are taxed in the same way as subsidiaries, at 15%, on Oman-source income. Article 40 confirms that foreign persons with a PE are taxed on Oman-source income only. We found no branch remittance tax in any source. Withholding tax of 10% applies to payments to non-residents for services, interest and royalties, though Deloitte reports that withholding on dividends and interest is currently suspended.
Petroleum — and the LNG rate nobody can source
Petroleum exploration taxpayers pay 55% on income derived from the sale of petroleum. That figure is on the Tax Authority's rates page and in Article 114 of the law. PwC adds that the real burden varies by individual exploration and production sharing agreement, and that the government may bear the tax out of its own production share.
Articles about Omani tax routinely refer to a special rate for companies engaged in the sale of Omani LNG. We searched for it and could not find it. No Omani government source, and no Big Four source, states a distinct income tax rate for LNG.
The 55% applies to petroleum exploration and the sale of petroleum. If a guide quotes you an LNG-specific percentage, ask it for the article number, because we could not locate one.
What exemptions survive
Very little of the old exemption regime is left. PwC records that for tax years beginning after 31 December 2016, sectoral exemptions were abolished except for industrial or manufacturing activity, and that new industrial exemptions are limited to an initial five-year period with no renewal. Mining, hotels, tourism, agriculture, fishing and education no longer qualify. Exemptions granted before the change were grandfathered.
Separately, and this one is published officially by the Tax Authority, there is a five-year exemption for companies in six economic-diversification sectors — industry under the GCC Unified Industrial Regulation, tourism, logistics, fisheries, agriculture and mining — that commenced activity between 1 January 2021 and 30 December 2022, under the Economic Stimulus Plan adopted by the Council of Ministers on 9 March 2021. The company must be established in Oman, registered with MOCIIP, licensed for the activity, and practising only that primary activity, with no double-dipping across exemptions. The window has closed, so this is now relevant only to companies already inside it. Note that exempt companies still have to file returns.
The Tax Authority also publishes two narrow exemption guidelines: income tax exemption for Omani companies and establishments whose activity is sea transport, and income tax exemption for hedge funds established in Oman. Both are on its income tax guidelines page, and both are Arabic-language documents.
Free zones and the special economic zones
OPAZ, the public authority that runs the zones, states officially that companies in its special economic and free zones receive income tax exemption of up to 30 years, a 100% exemption for all qualifying companies, and that the standard 5% VAT is not applicable inside the special economic and free zones. It gives Omanisation of roughly 10% at Salalah Free Zone and Duqm, rising to as much as 35% at Khazaen Economic City and the Madayn industrial cities.
| Zone | Reported exemption | Source quality |
|---|---|---|
| OPAZ zones generally | Up to 30 years | Official — OPAZ |
| Duqm SEZ | 30 years | Secondary — CMS guide |
| Salalah Free Zone | 30 years | Secondary — CMS guide |
| Sohar Free Zone | 25 years | Secondary — CMS guide |
| Al Mazunah Free Zone | 30 years | Secondary — CMS guide |
| Knowledge Oasis Muscat | Not published | No figure found |
Two cautions on that table. First, no Omani authority publishes a per-zone table of exemption durations — OPAZ gives only the ceiling, and Duqm's own income tax exemption service page omits the duration entirely. Second, on Omanisation for the Duqm exemption, Duqm's own page and OPAZ both indicate 10%, while the CMS guide says 25%. Prefer the official pages. Duqm's page does give useful procedural detail: registration in the zone, an activity licence, the 10% Omanisation rate and bank statements, applied for through the one-stop-shop portal, decided by ministerial decision, 30 working days, no fee.
The top-up tax: Royal Decree 70/2024
Oman has adopted an OECD Pillar Two regime. Royal Decree 70/2024, the Law of the Top-Up Tax on Constituent Entities of Multinational Groups, was issued on 31 December 2024, published in Official Gazette 1578 on 5 January 2025, and took effect on 1 January 2025.
It applies to multinational groups with consolidated revenues of EUR 750 million or more in at least two of the four preceding fiscal years, and enforces a 15% minimum effective rate. Governmental entities, international organisations, non-profits, pension funds, investment funds and real estate investment vehicles are excluded. Article II of the decree empowers the Chairman of the Tax Authority to issue the implementing regulations.
PwC says the law implements an Income Inclusion Rule only — no domestic top-up tax — so Oman entity profits are outside it. EY says the law contains both a DMTT and an IIR. oecdpillars.com also reads both into it, citing Articles 2 and 5, but adds that the law includes no detailed operating provisions for the DMTT beyond a list of excluded entities, and that it is therefore impossible to say whether it would be a qualified DMTT under the OECD model rules.
That reconciles most plausibly as a DMTT that exists on the face of the law but is inoperative until regulations arrive. And the regulations have not arrived. As at August 2026 we found no published executive regulations, no registration portal, and no filing deadline for the top-up tax — nineteen months after it took effect.
What no official source publishes
- No exhaustive excluded-activities list for the 3% rate. The Tax Authority FAQ gives one exclusion — professional activities. The five-item list everyone quotes is PwC's.
- No verifiable article number for the small-enterprise regime. Guides cite Article 118 bis constantly. The Tax Authority's own English Income Tax Law PDF contains Article 112 for the 15% rate, Article 113 for withholding and Article 114 for petroleum, and no small-enterprise chapter at all. We could not verify Article 118 bis against any accessible official text. Do not repeat it.
- No current English executive regulations. The only English version on the portal is the superseded 2012 text.
- No official Omani LNG rate.
- No top-up tax executive regulations, registration process or filing deadline.
A site called omancalc.com publishes a page titled *Oman Corporate Tax 9% Explained: Royal Decree 47/2022, OMR 30K Threshold*. This is the UAE regime transposed onto Oman. 9% is the UAE corporate tax rate and the threshold mirrors the UAE's AED 375,000. We could not verify Royal Decree 47/2022 as any Omani corporate tax law on decree.om.
This is the dominant failure mode in Gulf tax content, and it is not confined to small sites. A Deloitte Middle East page on small-business relief surfaces high in Omani SME tax searches and is, on inspection, entirely about UAE Ministerial Decision 73 of 2023 and its AED 3 million threshold. If a page about Omani tax mentions the FTA, EmaraTax, ZATCA or Dhareeba, or quotes 9%, 20% plus zakat, or 10%, close it.
Personal income tax does not change any of this
Oman published a Personal Income Tax Law, Royal Decree 56/2025, issued 22 June 2025 and published in the Official Gazette on 30 June 2025. It imposes 5% on individual income above OMR 42,000 a year and takes effect on 1 January 2028. It does not alter the corporate regime, the 15% rate or the 3% small-enterprise rate. Any 2026 article that blends the two is confusing separate laws.
Is corporate tax in Oman 9%?
Is the first OMR 30,000 of company profit tax-free in Oman?
How does my company qualify for the 3% corporate tax rate in Oman?
When do I have to register for corporate tax in Oman?
When is the Omani corporate tax return due, and what is the penalty for filing late?
Do companies in Oman's free zones pay corporate tax?
If you want the paperwork handled — registration inside the 60-day window, the annual return, or a written query to the Tax Authority about whether you fall inside the small-enterprise conditions — that is routine work at our office in Al Ghubra.