Oman charges withholding tax at 10% on certain payments to foreign persons who have no permanent establishment in the country. The rate applies to the gross amount, the Omani payer is the one legally obliged to deduct and remit it, and the money is due by the fourteenth day after the end of the month in which the payment was made or credited.
Who actually bears the cost
This is the part that catches people. Withholding tax is calculated on the gross amount of the invoice, with no deduction for the supplier's costs. If you agree a fee of OMR 10,000 with a foreign consultant for management services, OMR 1,000 goes to the Oman Tax Authority and OMR 9,000 reaches the consultant.
In practice most foreign suppliers refuse to absorb it. They invoice the full amount, expect the full amount, and treat the Omani tax as your problem. If your contract is silent you have two unattractive options: short-pay the supplier and argue, or gross up the payment so the supplier receives what was agreed, which turns a 10% tax into an 11.1% cost. Either way the economic burden lands on the Omani business.
Decide before signing whether the fee is stated gross of Omani withholding tax or net of it. One sentence — that the fee is inclusive of all Omani taxes and that the payer may deduct withholding tax and remit it to the Tax Authority — saves you the entire argument.
The duty to deduct is yours by law and cannot be contracted away. Article 53 puts it on the payer. If you fail to withhold, the Tax Authority looks to you, not to the supplier who has already been paid and gone.
The legal basis: Articles 52 and 53
The governing statute is the Income Tax Law, Royal Decree 28/2009, as amended — principally by Royal Decree 9/2017, which widened the base with effect from 27 February 2017, and by Royal Decree 118/2020, which among other things replaced references to the Minister of Finance with the Chairman of the Tax Authority throughout. RD 28/2009 is still the operative corporate income tax law in August 2026.
Article 52 is the charging provision. In the Tax Authority's own English text it reads: "Tax shall be charged on the following categories of income accruing in Oman: 1. Royalties; 2. Research and development consideration; 3. Computer software use right consideration; 4. Management fees or service performance fees; 5. Dividends or interests on shares." Article 53 then requires the payer to "deduct the tax from the gross amount" and remit it "not later than fourteen days following the end of the month in which payment or credit was made, whichever is earlier", and to send a copy of the prescribed form to the recipient. The 10% rate read out of that same official text as Article 113 — we are confident in the rate and less confident in that article number.
The five categories, and which are live
| Category in Article 52 | Status in August 2026 | Rate |
|---|---|---|
| Royalties | Live | 10% |
| Research and development consideration | Live | 10% |
| Use of, or right to use, computer software | Live | 10% |
| Management fees or service performance fees | Live, subject to the negative list | 10% |
| Dividends on shares, and interest | Suspended — see below | Not collected |
The charge only bites on a foreign person or company that has no permanent establishment in Oman. That is the Tax Authority's own definition on its Income Tax FAQ page. A foreign supplier that does have an Omani permanent establishment falls outside withholding tax altogether and is instead assessed on the permanent establishment's income in the normal way at 15%. No official page states that second half affirmatively — it follows from the definition — but it is the correct reading and it matters commercially, because a foreign contractor operating through a registered Omani branch should not be having 10% deducted at source.
Payments to residents — Omani companies, and individuals resident in Oman — carry no withholding tax at all. That is stated by Moore Global rather than by a government page, but it follows directly from Article 52's limitation to income accruing to foreign persons.
The negative list: why most offshore services escape
Category four, "management fees or service performance fees", would on its face catch almost every cross-border invoice. It does not, because the Executive Regulations of the Income Tax Law, Ministerial Decision 14/2019, published 10 February 2019, introduced a negative list of excluded services. The Tax Authority reproduces that list on its own Income Tax FAQ page:
- Training
- Transport, shipping and freight
- Insurance, and reinsurance
- Airline tickets, and accommodation abroad
- Board of directors' meetings
- Services related to activities or property outside Oman
The last item decides most real cases. Where a foreign firm performs work outside Oman connected to activity or property outside Oman, the payment falls outside withholding tax. This is why a great deal of offshore professional work attracts no Omani withholding tax at all — and because it sits on an official Tax Authority page, you can rely on it rather than on a consultant's assurance.
Be careful with the boundary. The exclusion turns on where the activity or the property is, not on where the invoice was raised or where the consultant was sitting. Work performed abroad *for an Omani project* is a different case from work performed abroad for an overseas project.
MEED additionally lists participation in conferences and exhibitions as excluded. That one is secondary reporting rather than an official page, so treat it as probable rather than settled.
Dividends and interest: suspended, but still in Article 52
This is the most confused area in Omani tax writing, so here is the sequence as far as we can trace it. RD 9/2017 added dividends and interest to Article 52 with effect from 27 February 2017. Collection was then suspended with effect from 6 May 2019 for an initial period of three years, according to Orbitax. Moore Global reports the suspension was extended, describing it as running through 2024. Then a Royal Directive issued by His Majesty Sultan Haitham bin Tarik on 11 January 2023, on the occasion of Accession Day, called for complete suspension of withholding tax on dividends and interest paid to non-resident investors. PwC, whose Oman chapter was last reviewed on 7 July 2026, describes the charge as permanently suspended. KPMG says it has ceased indefinitely.
Now the part almost nobody states clearly. **The 11 January 2023 instrument is a Royal *Directive*, not a numbered Royal Decree.** KPMG says so expressly and gives no number. We searched decree.om for any numbered decree amending or repealing Article 52(5) and found none. So the accurate description of the position in August 2026 is that dividends and interest remain in the text of Article 52, unrepealed, with collection suspended. That is not the same as the charge having been abolished — and if you see an article citing a decree number for the suspension, the number is very likely invented.
The Authority's withholding tax page lists seven categories of income and includes dividends and interest.
The Authority's Income Tax FAQ page lists five and omits dividends and interest entirely.
Both are official Omani government pages. We are not going to pretend one of them does not exist.
Our reading — and it is a reading, not a sourced fact — is that the withholding tax page restates the unrepealed statutory text of Article 52, while the FAQ page reflects what the Authority actually collects. That is consistent with everything the professional firms report. What you should not do is accept a flat statement in either direction. "Dividends and interest are subject to 10% withholding tax in Oman" is wrong in practice. "The charge was repealed" is wrong in law.
One further suspension worth knowing: PwC reports that withholding tax on the lease of ships, aircraft and aircraft engines was suspended with effect from 29 December 2022. That is secondary only — we found no official page confirming it.
Who must withhold, and by when
The Tax Authority's withholding tax page puts the obligation on "any taxpayer or any government body who pays or credits to the account any amounts of the aforementioned types of income". The extension to ministries and public authorities came in with RD 9/2017 from 27 February 2017, so government payments abroad are caught in the same way commercial ones are.
The deadline is the fourteenth day following the end of the month in which the amount was paid or credited to account, whichever is earlier. The "or credited" limb matters more than the payment limb for anyone on accruals: booking a management fee to an intercompany account can start the clock even though no cash has moved. This deadline appears identically in Article 53, on the withholding tax page and in the Income Tax FAQ, so it is as solid as anything in Omani tax.
Double tax agreements, and the procedure nobody publishes
The Tax Authority lists 44 double tax agreements in force, covering among others the United Kingdom, France, Italy, Spain, Portugal, the Netherlands, Switzerland, Hungary, Croatia, Slovakia, Estonia, Luxembourg, Ireland, Cyprus, Russia, Belarus, Moldova, Turkey, Iran, Qatar, Egypt, Morocco, Algeria, Tunisia, Lebanon, Syria, Yemen, Sudan, Tanzania, South Africa, Mauritius, Seychelles, India, Pakistan, Sri Lanka, China, Japan, Korea, Singapore, Thailand, Vietnam, Brunei, Uzbekistan and Canada. Recent additions confirm the list is live: Ireland was ratified in December 2024, Luxembourg and Estonia in January 2025, and Bahrain and Kazakhstan in September 2025.
PwC's treaty matrix shows royalty rates ranging from 0% to 18% and dividend rates from 0% to 15%, with several dividend rates conditional on a minimum shareholding. Note the direction of travel: where a treaty rate is *higher* than the domestic 10%, the domestic rate applies, because a treaty caps the source state's charge — it does not raise it.
This is a genuine gap and it is worth stating plainly. The Tax Authority's double tax agreements page publishes the treaty texts and a guidance document on the mutual agreement procedure. It publishes no procedure, no form and no timetable for claiming a reduced treaty rate against a withholding tax payment.
The only description we could find anywhere is from Moore Global, whose Oman guide was last modified on 16 January 2025: treaty rates "can be applied subject to prior approval from the TA". That points to relief by advance authorisation rather than automatic relief at source or a self-service refund. One secondary sentence is the entire evidence base.
So when a supplier in a treaty country pushes for a reduced rate, the honest position is that the mechanism is not knowable from published sources. Get the Tax Authority's position in writing before you deduct at anything other than 10%.
The prescribed form that is not published
Article 53 requires the payer to send the recipient "a copy of the prescribed form". We could not find that form, a form number, or any withholding tax filing guide anywhere on taxoman.gov.om or tms.taxoman.gov.om. There is a withholding tax section on the portal and a page headed "Withholding Tax Certificates", but that page carries no substantive content — only navigation links. Remittance and reporting run through the tax portal account in practice, and the sensible course is to ask the Authority for the current form rather than to rely on a template lifted from a blog.
Penalties: what we can trace and what we cannot
One figure is official. The Tax Authority's Income Tax FAQ gives the penalty for non-submission of returns as "not less than 100 RO, and not exceeding 2000 RO" — so OMR 100 to OMR 2,000. Everything below is secondary, because the penalties chapter of the Income Tax Law was not in the retrievable portion of the Authority's own published English text, which stops at the tax assessment and collection part.
- Late payment — additional tax of 1% per month on unpaid amounts, from the due date until payment. Reported by both PwC and Moore Global.
- Failure to withhold — the Omani payer becomes directly liable for the tax it should have deducted, in addition to any fines. Reported by a single consultancy source attributing it to RD 28/2009.
- Undeclared income — a fine of 1% to 25% of the tax difference. Reported by PwC.
There is no official published penalty schedule for failing to withhold under Article 53. We looked for one. That absence is a finding rather than a gap in our research, and it means that anyone quoting you a precise fine for a withholding failure is quoting a secondary source, whether or not they say so.
Sources you should discard
Gulf tax content has a specific failure mode: material about the United Arab Emirates or Saudi Arabia presented as though it described Oman. Withholding tax is where this happens most, because the three regimes are genuinely different. The UAE has no withholding tax — the rate is zero. Saudi Arabia has a tiered regime at 5%, 15% and 20%. Oman has a single flat 10%. If a page gives Oman a tiered rate, or mentions the Federal Tax Authority, EmaraTax, ZATCA or Dhareeba, it is not describing Oman. Oman's portal is tms.taxoman.gov.om.
At least one page presents itself as explaining "Oman Corporate Tax 9%" under "Royal Decree 47/2022", with a small-business threshold in Omani rials.
We opened Royal Decree 47/2022 on decree.om. It grants Omani nationality to a list of named individuals. It has nothing whatever to do with tax. And a 9% rate with a small-business threshold is the United Arab Emirates corporate tax regime, not Oman's — Oman's rates are 15% standard and 3% for qualifying small taxpayers.
Verify any decree number you are handed against decree.om before you rely on it. It takes a minute and it catches this whole class of error.
The wider point: a decree number lends writing an air of authority that is very easy to fake and very easy to check. Every decree number in this article is one we have opened.
What the 2028 personal income tax does not change
Royal Decree 56/2025 issues the Personal Income Tax Law. We confirmed on decree.om that Article I enacts the attached law, that Article IV brings it into force on 1 January 2028, and that it repeals Article 18 bis (1) of the Income Tax Law. It does not touch the Article 52 and 53 withholding regime. So if you are planning payments abroad, nothing in the 2028 reform changes the analysis above.
A practical sequence for an Omani payer
- Establish whether the recipient is a foreign person with no permanent establishment in Oman. If it has a permanent establishment, withholding tax does not apply to it.
- Identify the category. Royalty, research and development, computer software right, or management or service fee — those four are live.
- Check the negative list, and in particular whether the service relates to activity or property outside Oman.
- Settle the gross-or-net question in the contract, before signing.
- Deduct 10% of the gross amount at the earlier of payment or credit to account.
- Remit by the fourteenth day after the end of that month, and give the recipient the prescribed form.
- If a treaty rate is in play, get the Tax Authority's position in writing first, because no published procedure exists.
Is there withholding tax on dividends and interest in Oman?
What is the rate of withholding tax in Oman?
Who bears the 10% — me or my foreign supplier?
Do I have to withhold tax on services performed outside Oman?
When must Omani withholding tax be remitted?
How do I claim a double tax treaty rate in Oman?
The compliance itself is light. The expensive part is the contract wording, and that has to happen before you sign rather than after the first invoice arrives. Our office in Al Ghubra can handle the deduction, the remittance and the portal filing if you would rather not.