Oman’s tax framework boosts investor appeal

MUSCAT: Oman’s tax system is increasingly regarded as efficient, transparent, and attractive to foreign investors, largely due to its low compliance burden and growing digitalisation. Medium-sized companies in the Sultanate spend around 68 hours a year preparing, filing, and paying taxes—far below regional and global averages of more than 200 hours—making the country a competitive destination for investment in terms of time and cost.
A key strength of the system is its advanced digital platform. Since March 2020, taxpayers have been required to submit returns and make payments electronically, eliminating manual filings. This has simplified compliance, particularly for foreign companies, which can meet their obligations remotely. The same system supports value-added tax (VAT), introduced in 2021 at a rate of 5 per cent under the GCC framework, with quarterly filings and clear sector-specific electronic guidance issued by the Tax Authority.
Oman applies a corporate income tax rate of 15 per cent, while personal income is not taxed. The total tax burden on companies is estimated at around 27.4 per cent of gross profits, which remains competitive by international standards. Although some GCC countries impose no tax on foreign profits, Oman still compares favourably with many global and Asian emerging economies in terms of compliance efficiency and predictability.
The tax environment is further strengthened by its stability and simplicity. Oman operates a single income tax regime with no local taxes, allowing investors to plan long-term projects with confidence. The low VAT rate also helps reduce business costs when compared with markets where rates range from 7 per cent to 20 per cent. In addition, generous incentives are available in free zones and special economic zones, including tax exemptions of up to 10 years or more, significantly improving early-stage investment returns.
Dr Khalifa bin Saif al Hinai, founder of Khalifa Al Hinai Law Firm, said the tax system, like any new framework, faces initial challenges but will continue to evolve through review and refinement. He noted that effective tax implementation supports state revenues while stressing the importance of balancing compliance with facilities that consider the needs of businesses and individuals to sustain economic growth.
Abdul Latif Mohiuddin Khonji, Board Member of the Oman Chamber of Commerce and Industry and Chairman of its Foreign Investment Committee, said Oman now offers one of the most predictable tax environments in the GCC. He highlighted the 15 per cent corporate tax rate, absence of personal income tax, extensive double taxation agreements, and long-term incentives in free zones as key factors boosting investor confidence. He added that Oman’s alignment with international transparency frameworks and its strong performance in the Ease of Paying Taxes indicators position the Sultanate as a compelling destination for sustainable foreign investment. — ONA