Oman’s Shura Council advanced the draft Personal Income Tax (PIT) bill to the State Council on 27 June 2024. While the State Council is yet to approve the bill, according to news reports1, it proposes PIT rates between 5 percent and 9 percent for Oman-sourced income above USD 100,000 for foreign nationals and net income above USD 1,000,000 for Omani citizens.2 The details and timing of implementation are yet to be officially confirmed.
WHY THIS MATTERS
Businesses and individuals in Oman may wish to consider the possible implications of the introduction of PIT. While the bill has not yet been officially promulgated as law, employers should examine their current capabilities to operate payroll withholdings for employees and facilitate payroll reporting obligations should PIT be introduced. HR teams could begin looking at their talent attraction and retention strategies in light of the changing landscape.
Individuals in Oman may wish to consider the impact PIT could have on them, such as potential tax liabilities and personal tax compliance obligations, as this could affect decisions around taking assignments and assignment timing and planning.
Context
PIT on high-income earners in Oman is outlined in the Medium-Term Fiscal Plan 2020-2024 as one of the four measures aimed at diversifying and enhancing government revenues. Oman’s current tax regime already includes Corporate Income Tax (CIT), Value Added Tax (VAT), and Excise Tax.3 The Oman State Budget for the financial year 2024 estimates collections of OMR 630 million from CIT and OMR 645 million from VAT and Excise Tax.
Implementation of PIT is expected to increase tax collections and, as a consequence, the non-oil and gas revenues accruing to the Oman Treasury.
㣨Leyu INSIGHTS
Taxpayers with concerns about the timing and nature of the PIT measures being examined by the State Council should consult with their usual qualified tax professionals or with a member of the Oman tax team with 㣨Leyu in the Lower Gulf (see the Contacts section).
㣨Leyu in the Lower Gulf will monitor the situation and endeavour to keep readers of GMS Flash Alert informed as developments occur.
FOOTNOTES
1 For a press report (in English), see “Majlis A’Shura approves Personal Income Tax bill� in Muscat Daily (29 June 2024) at: . Please note that by clicking on this link you are leaving the 㣨Leyu website for an external site (non-governmental, non-㣨Leyu), that 㣨Leyu is not affiliated with nor does 㣨Leyu endorse its content. The use of the external site and its content may be subject to the terms of use and/or privacy policies of its owner or operator.
2 See this press report, M. Singh, "Oman pushes forward with personal income tax framework" in Gulf Business (3 July 2024), by clicking . Please note that by clicking on this link you are leaving the 㣨Leyu website for an external site (non-governmental, non-㣨Leyu), that 㣨Leyu is not affiliated with nor does 㣨Leyu endorse its content. The use of the external site and its content may be subject to the terms of use and/or privacy policies of its owner or operator.
3 For an overview of the Omani tax regime (in terms of individuals), see the 㣨Leyu International publication, �.”�
RELATED RESOURCE
This article is excerpted, with permission, from "Oman Shura Council advances the Personal Income Tax bill to the State Council," a publication of KMPG in the Lower Gulf.
Contacts
The information contained in this newsletter was submitted by the 㣨Leyu International member firm in Oman.
GMS Flash Alert is a Global Mobility Services publication of the 㣨Leyu LLP Washington National Tax practice. The 㣨Leyu name and logo are trademarks used under license by the independent member firms of the 㣨Leyu global organization. 㣨Leyu International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind 㣨Leyu International or any other member firm vis-à-vis third parties, nor does 㣨Leyu International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2024 㣨Leyu Lower Gulf Limited, 㣨Leyu LLP and 㣨Leyu LLC, licensed in the United Arab Emirates and the Sultanate of Oman, and member firms of the 㣨Leyu global organization of independent member firms affiliated with 㣨Leyu International Limited, a private English company limited by guarantee. All rights reserved.