Oman Personal Income Tax

Oman does not levy personal income taxes. However, tax is imposed on the income derived by sole proprietors. The first OMR30,000 of a sole proprietor’s net taxable income is exempt from tax. Amounts in excess of OMR30,000 are subject to tax at a rate of 12%. Only an Omani national or, under certain circum­stances, a national of a Gulf Cooperation Council (GCC) mem­ber country may operate a business as a sole proprietor in Oman.

Individual persons carrying on professional business in their indi­vidual capacities are taxable at a rate of 12% on income in excess of OMR30,000.

Partnerships are taxed at corporate rates. To transact business in Oman, partnerships must have at least one Omani partner and must be registered with Omani authorities. Partnerships estab­lished by agreements entered into outside Oman that carry on profitable activity in Oman are taxed in Oman at a rate of 12% on income in excess of OMR30,000 that is attributable to a per­manent establishment in Oman.

No special rules apply to capital gains. Capital gains are taxed as part of the regular income of sole proprietors and partnerships.

Profits derived from the sale of investments and securities listed on the Muscat Securities Market are exempt from tax.

Other taxes

Oman does not levy value-added tax, net worth tax, estate tax or gift tax.

Social security and vocational training levy

Under the social security law, employers and employees must make contributions to a pension fund. Effective from 1 July 2014, the rates, which are applied to each employee’s monthly wage, are 10.5% for employers and 7% for employees.

The following is the definition of “monthly wage”:

“ All amounts paid to the insured in cash or in kind or periodi­cally or regularly for his work whatever the method used for its determination, or is the sum of basic wages plus allowances which shall be determined by a decision of the Minister after the approval of the Board of Directors.”

In addition, employers must contribute an amount equal to 1% of an employee’s basic salary to cover the risks of occupational injuries and diseases.

Social security taxes currently apply to Omani employees only.

A vocational training levy (VTL) must be paid by private sector employers in Oman with respect to their expatriate employees. The VTL rate is OMR200 (USD520) once every two years for each expatriate employee.

Tax treaties

Oman has entered into double tax treaties with the following countries.

Belarus Japan Singapore
Brunei Korea (South) South Africa
Darussalam Lebanon Spain
Canada Mauritius Thailand
China Moldova Tunisia
Croatia Morocco Turkey
France Netherlands United Kingdom
India Pakistan Uzbekistan
Iran Seychelles Vietnam
Italy    

Oman has signed double tax treaties with Algeria, Belgium, Egypt, Germany, the Russian Federation, Syria and Yemen, but these trea­ties are not yet in force.

Visit visas

All foreign nationals must obtain valid entry visas to enter Oman, with the exception of Gulf Cooperation Council (GCC) nationals from Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates. However, foreign nationals who are residents of any GCC country and whose residence permits are valid for a mini­mum of six months may obtain entry visas on arrival in Oman.

Normal visit visas. Several different types of normal visit visas are issued based on the purpose of the visit, including visas for businesspersons, tourists, family members of resident permit hold­ers and those making official or personal visits to Oman. All visit visas are valid for six months from the date of issuance. Stays are limited to one month from the date of entry, except for family visit visas, which are valid for three months.

Citizens from countries mentioned in List #1 issued by the immi­gration authorities, such as Austria, France, Germany, Italy, the United Kingdom and the United States, may obtain single-entry visit visas on arrival at all ports-of-entry into Oman. Nationals of countries mentioned in List #1 may also obtain single-entry visit visas by applying to Omani diplomatic missions and commercial representation offices. Missions and offices can issue these visas without obtaining the approval of the Directorate General of Passports and Residency in Muscat. The validity period of an applicant’s passport must be at least six months.

Citizens of countries on the above lists can obtain multiple-entry visit visas. This visa is issued on arrival at all land-, sea- and air- entry points after filing the visa application form. It is not pos­sible to extend the length of the visa. A holder of this visa must enter Oman within three months after the date of its issuance (see Multiple-entry visas).

Citizens of countries not appearing on the above lists may apply for express visas, which can generally be obtained within 24 hours (see Express visas).

A penalty of OMR10 per day is imposed if an individual stays in the country beyond the validity period of a visa.

Express visas. Express visas are for business visits only and can generally be obtained within 24 hours. The visas are valid for six months from the date of issuance, and stays are limited to three weeks. The duration of a stay cannot be extended beyond three weeks. The fee for express visas is OMR30.

Multiple-entry visas. Multiple entry visas can be granted for entry into Oman more than once. In general, these visas are valid for six months to one year. Visa holders can enter the country during the validity period of the visa and stay in Oman for a maximum of three weeks at a time. These visas can be issued without a local sponsor.

Alternatively, local sponsors can request multiple-entry visas for business purposes.

Foreign investors in land or buildings in integrated tourism com­plexes that are under construction and their relatives of the first degree can be granted a multiple-trips investors visa for two years each time, up to the completion of construction. The fee for the visa is OMR50.

Foreign investors in land or buildings in integrated tourism com­plexes that are constructed and their relatives of the first degree are granted owners’ visas for a period of two years each time. These visas are renewed automatically two years each time, up to a total of six years, without the need to submit an official applica­tion. The fee for the visa is OMR50.

Scientific-research visas. Scientific-research visas are issued to foreigners coming to Oman for scientific research. These visas are issued at the request of the local specialized authorities. The visas must be used within three months after the date of issuance. The visa holder can stay in Oman for three months, which may be extended for a maximum of two months. The fee for the visa is OMR50.

Employment visas and self-employment

Employment visas. Employers must obtain employment visas for their expatriate employees aged 21 or older to enter Oman. The application process requires a labor clearance from the Ministry of Manpower. The ministry reviews the labor clearance request from the employer and considers whether the position meets with approval criteria, which includes the level of Omanization achieved or planned.

The duration of employment visas is limited to two years from the date of entry. Applicants may not work in Oman until all papers are completely processed. The employment visa must be used within three months after the date of its issuance.

Individuals holding employment visas in Oman must not stay outside Oman for more than six months. However, this rule does not apply to family members of employment visa holders.

Resident cards. Expatriates on work visas in Oman must have a resident card which is issued by the Directorate General of Civil Status. This card must be obtained within 30 days after entry into Oman. The card is valid for two years from the date of issuance.

It is possible to change employers after an applicant has received a resident card. However, the initial employer must provide a let­ter stating no objection to the change. Otherwise, the expatriate must leave the country after canceling his or her previous employment visa.

Investors’ visas. Foreign nationals may obtain investors’ visas under certain circumstances. The investor or the investor’s part­ner must obtain the approval of the investment from the Ministry of Commerce and Industry. Investors’ visas are valid for a period of two years.

Owners’ visas. Owners’ visas are granted to foreigners who own a unit built in an integrated tourism complex in Oman. These visas are issued to two natural persons representing the owner if the owner is a juristic person. Owners’ visas must be used within six months after the date of their issuance. They can be issued with­out a sponsor. A joint owner’s visa is also issued to the spouse of the holder of an owner’s visa. The fee for an owner’s visa is OMR50.

Self-employment. Foreign nationals, except nationals of GCC­member countries, may not start businesses in Oman. However, an individual holding a business visa may conduct business through a company that includes Omani shareholding.

Only an Omani and a national of one of the GCC-member coun­tries may own land or buildings in Oman. Foreigners may own property only within designated integrated tourism complexes.

A foreign company is allowed to set up a subsidiary headed by a foreigner; however, certain rules limit the extent of foreign shareholding.

Residence permits

Employees must obtain residence permits, which are valid for two years. Residence permits are applied for by the employer in Oman. Residence permits are renewable every two years.

To obtain a residence permit, the employee must have a valid resident card (see Section F) and an employment visa endorsed in his or her passport.

Family and personal considerations

Family members. Applications for family-joining visas must be sponsored by an Omani national or a company with commercial registration in Oman. The recipient must be either the spouse, a child below the age of 18 or close dependent of the holder of a valid resident card and residence permit.

Driver’s permits. Western nationals with visit visas may drive rental cars in Oman using their home country driver’s licenses for a period of three months. For most Western countries and all GCC-member countries, license holders may exchange their licenses for Omani driver’s licenses, provided that the license had been issued at least one year earlier. Oman has driver’s license reciprocity with most countries.

New GCC driver’s licenses are valid for 10 years. Country-specific licenses are no longer being issued. New licenses issued by Oman contain a GCC logo.