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Service · Tax & Compliance · Oman

Tax & VAT in Oman, by the numbers.

Oman's tax regime is one of the lightest in the GCC — 3% corporate tax for SMEs, 5% VAT, no personal income tax, no capital gains tax. But the registration and filing obligations are real, the penalties for missing them are sharp, and the rules around withholding tax on cross-border payments catch most foreign founders by surprise. Marhaba handles tax card registration, VAT registration where required, and ongoing filings through our accounting partners.

3% corporate tax under OMR 100k
5% VAT (above OMR 38,500)
0% personal income tax
4 months annual filing window
3%
Corporate tax under OMR 100k revenue (SME regime)
15%
Standard corporate tax above the SME threshold
5%
VAT on domestic sales (above OMR 38,500 turnover)
10%
Withholding tax on certain cross-border payments
The numbers, by tax

Every rate that applies to your Omani company.

Use this as a quick-reference card. Specific eligibility, exemptions, and treaty positions vary — confirm against your activity in the discovery call.

Corporate Income Tax

Annual filing
SME concessional rate
3%
For Omani SMEs with annual revenue below OMR 100,000 that meet prescribed conditions (including employee count caps and limits on related-party expenses).
Standard corporate rate
15%
Applies to all other companies — domestic and foreign-owned — on net taxable income. Most Marhaba clients with material activity fall here within 1–2 years of incorporation.
Oil & gas sector
55%
Petroleum extraction and certain hydrocarbon-related activities. Sector-specific regime; outside Marhaba's typical engagement scope.

Value Added Tax (VAT)

Quarterly filing
Standard VAT rate
5%
Charged on most domestic supplies of goods and services. Recoverable on most business inputs for VAT-registered companies.
Mandatory registration threshold
OMR 38,500
Annual taxable supplies. Once you cross this in a rolling 12-month window, registration is required within 30 days.
Voluntary registration threshold
OMR 19,250
Optional registration available from this level — useful when you need to recover input VAT or trade with VAT-registered counterparties.
Zero-rated supplies
0%
Exports outside the GCC, international transport, certain medicines and medical equipment, supplies to or within designated zones.
Exempt supplies
Exempt
Certain financial services, residential real estate, bare land, local passenger transport, healthcare and education (defined categories).

Withholding Tax (cross-border)

Payment-triggered
Royalties, management fees, certain services
10%
Withheld at source on payments by Omani companies to non-resident recipients. Catches most foreign founders by surprise on parent-company management fees and IP licence payments.
Double-tax treaty relief
Reduced/0%
Oman has tax treaties with many jurisdictions (Netherlands, UK, Germany, India, Singapore, others). Where a treaty applies, the withholding rate can be reduced or eliminated — but the relief must be claimed proactively.

Personal Income Tax

No filing required
All personal income
0%
Oman currently does not impose personal income tax on residents or non-residents. Capital gains, dividends received personally, and salary are all untaxed at the individual level.
What catches people out

Withholding tax is the single biggest tax surprise for foreign founders. The first time you invoice your Omani company from your home country (for management services, IP licensing, or director fees), you discover that 10% has been withheld at source. Sometimes a treaty can recover it; sometimes it can't. Plan the structure before the first payment, not after.

When you file what

Filing calendar, at a glance.

Late filings carry penalty fees and interest. Most are avoidable with a calendar — and that's effectively what your PRO retainer and accounting partner are buying you.

Annual

Corporate income tax return

Due: 4 months after FY-end

For a calendar-year company, the deadline is 30 April. Includes full financial statements, related-party disclosures, and any treaty relief claims.

Quarterly

VAT return

Due: 30 days after quarter-end

For VAT-registered companies. Submitted online through the Oman Tax Authority portal. Quarterly periods aligned to the calendar year.

Per payment

Withholding tax return

Due: 14 days after payment

Filed each time a payment subject to withholding tax is made to a non-resident. Includes treaty-relief claims if applicable.

Annual

Tax card renewal

Due: Per renewal date

The tax card itself renews periodically with the Oman Tax Authority. Marhaba's PRO retainer tracks this alongside CR and OCCI renewals.

How Marhaba handles tax

From tax card to annual filing.

Tax registration and the first year of compliance are typically split between Marhaba (registration, filings coordination, advisory) and our accounting partners (bookkeeping, tax return preparation, audit where required).

1
Day 1–7 · Setup

Tax card registration

Registered with the Oman Tax Authority alongside your commercial registration. Issued automatically as part of every Marhaba formation package (Start, Launch, Grow). Required before any tax return can be filed.

2
Once revenue clears threshold

VAT registration

Mandatory once you cross OMR 38,500 in rolling annual taxable supplies. We monitor your revenue trajectory (or you flag it) and register within the 30-day statutory window. Voluntary registration is available earlier if it benefits your input-VAT recovery.

3
Monthly

Bookkeeping

Handled through our accounting partners on monthly cycles. Reconciliations, ledger maintenance, VAT-line tagging if you're registered, payroll bookings. Output is a clean trial balance ready for tax-return preparation.

4
Quarterly (if VAT-registered)

VAT return preparation & filing

VAT return prepared from the monthly books, reviewed for input-output reconciliation, and filed within 30 days of quarter-end. Any refunds claimed; any liabilities paid.

5
Annual

Income tax return & financial statements

Annual financial statements prepared (audited where required by the activity or revenue threshold). Corporate income tax return computed and filed within four months of financial year-end. SME 3% regime claimed where eligible.

6
As needed

Withholding tax filings

Every time a payment subject to withholding tax is made to a non-resident, the return is filed within 14 days. Treaty-relief claims included where the recipient is in a treaty jurisdiction. Marhaba flags exposure before payments, not after.

Pricing

Tax registration is included in formation. Ongoing work is priced clearly.

Tax card registration is part of every Marhaba formation package. Beyond that, ongoing tax compliance pricing depends on what you actually need — bookkeeping, VAT returns, income tax returns. We don't bundle services you don't need.

Included
Tax card registration
Registration with Oman Tax Authority and tax card issuance. Included in Marhaba Start, Launch, and Grow packages.
OMR200
Tax card (standalone)
For existing Omani companies that need a new tax card or to reactivate a lapsed one.
OMR250
VAT registration
VAT registration with the Oman Tax Authority for companies crossing the OMR 38,500 mandatory threshold. Includes setup of your first quarterly filing cycle.
OMR150
VAT return preparation & filing
Per quarterly return, for SMEs. Coordinated with our accounting partner using your monthly books.
OMR500
Annual corporate tax return
For SMEs claiming the 3% concessional rate. Larger or audited companies are quoted based on complexity.
From OMR200
Monthly bookkeeping
Per month, through our accounting partners. Pricing scales with transaction volume; quoted after the discovery call.

Marhaba Business Solutions LLC provides registration and coordination services. Bookkeeping, tax return preparation, and audit work are executed by our accounting partners who hold the relevant Oman Tax Authority licences. The licensed accountant retains formal responsibility for tax filings; Marhaba retains the client relationship and accountability for service delivery. Tax positions, audit risk, and any disputes with the Oman Tax Authority rest with the registered taxpayer.

Frequently asked

Honest answers, no sales spin.

What is the corporate tax rate in Oman?
Omani corporate income tax is 3% for companies with annual revenue below OMR 100,000 that meet prescribed conditions (including a maximum of 15 employees and limits on certain expense categories), and 15% above that. The 3% concessional rate is the Omani SME regime and applies automatically to qualifying companies — you don't need to elect into it, but you do need to meet the conditions to keep it. There is no personal income tax in Oman; the 15% applies only to corporate profits.
When is my company required to register for VAT in Oman?
VAT registration is mandatory once your annual taxable supplies exceed OMR 38,500. Voluntary registration is available from OMR 19,250. VAT is charged at 5% on domestic sales; exports outside the GCC are zero-rated. Certain categories (basic foodstuffs, healthcare, education, financial services, residential real estate) are either exempt or zero-rated depending on the specific item. Marhaba confirms your VAT obligation in the discovery call based on your projected turnover and activity mix.
What's the difference between a tax card and VAT registration?
A tax card is the basic registration every Omani company must hold with the Oman Tax Authority — it's issued at the same time as your commercial registration and is required to file annual corporate income tax. VAT registration is a separate requirement that only applies once your taxable supplies cross the OMR 38,500 mandatory threshold (or OMR 19,250 voluntary threshold). A company can have a tax card without being VAT-registered; you cannot file VAT returns without being VAT-registered.
When do Omani companies need to file annual tax returns?
Annual corporate income tax returns must be filed within four months of the company's financial year-end. For most companies with a calendar year-end (31 December), the deadline falls on 30 April of the following year. VAT-registered companies file quarterly VAT returns, due within 30 days of the end of each quarter. Withholding tax returns are filed per payment, within 14 days of the payment being made. Late filings incur penalties and interest charges.
Does Oman have withholding tax on payments abroad?
Yes. Oman applies a 10% withholding tax on certain categories of payments made by Omani companies to non-resident recipients — including royalties, management fees, and certain services performed outside Oman. The exact application depends on the payment type and whether a relevant double-tax treaty applies. Oman has tax treaties with many jurisdictions (Netherlands, UK, Germany, India, Singapore, others) which can reduce or eliminate the withholding rate — but the relief must be claimed proactively. Marhaba flags withholding tax exposure during onboarding so it's planned for, not discovered after a payment is made.
Are there tax incentives in Oman's free zones?
Yes — companies established in Oman's free zones (Duqm, Sohar, Salalah, Al Mazunah) generally qualify for a corporate income tax exemption of up to 30 years subject to local content and activity requirements set by each zone authority. VAT may still apply on domestic sales. Sales into the Omani mainland are typically treated as imports and may incur customs duty and tax. The tax holiday is one of the strongest reasons to choose a free zone — but it requires real local activity, not a shell entity. See our Free Zone Setup page for the full picture.
Do Omani companies need their accounts audited?
Audit is required by activity category and revenue threshold — not by entity type alone. Most LLCs above a certain revenue level need annual audited financial statements, as do companies in regulated activities (financial services, insurance, certain real estate categories). SMEs operating under the 3% concessional regime have lighter requirements but still need to maintain proper books. Marhaba's accounting partners handle both audit-required and audit-exempt clients; we confirm which category you fall into during onboarding.
Can I reclaim VAT paid on business inputs?
Yes, if you are VAT-registered. Input VAT paid on business expenses is generally recoverable against your output VAT on sales — meaning you effectively only remit the net amount (or claim a refund if inputs exceed outputs). This is one of the reasons some businesses register voluntarily before crossing the mandatory threshold: it converts VAT on your costs from a sunk expense to a recoverable item. Input VAT on certain categories (employee benefits, entertainment, exempt-supply inputs) is not recoverable. Treatment varies by item; we structure your VAT registration to optimise where eligible.
What happens if I file or pay tax late in Oman?
Late filings incur penalty fees plus interest on any unpaid tax — both compound the longer the delay continues. Persistent or wilful non-compliance can lead to deregistration, blocking of future government services, and in serious cases prosecution. Routine late filings are usually resolvable with payment of the penalty and back-tax, but the cost adds up quickly. The PRO retainer and accounting cycle are deliberately structured to prevent late filings rather than recover from them.
Let's talk

Thirty minutes to map out your tax obligations.

No obligation, no pitch. Tell us your projected revenue, expense mix, and cross-border payment plans — we'll come back with a clear picture of your tax exposure and a fixed quote within 24 hours.

☎ +968 9894 2482 ✉ info@marhaba-business.com 📍 Bowshar, Muscat