Oman
Oman Unveils New Corporate and VAT Tax Rates Aligned with Vision 2040. Oman’s Tax Authority has announced updated corporate income tax and VAT rates. These changes reflect the country’s commitment to fostering economic growth and supporting small and medium enterprises (SMEs). while ensuring that taxation policies are streamlined to meet national goals.
New Corporate Income Tax Rates
The newly introduced corporate income tax rates are designed to encourage business development across various sectors. The Tax Authority has established three tiers for corporate taxation:
- 15%: This rate applies to the net profit of major companies operating in Oman. Marking the standard corporate tax rate.
- 0%: A full exemption is granted to establishments holding a Riyada card, provided the owner is actively involved in managing the business or employs Omani workers. This is part of a broader effort to support SMEs and encourage local entrepreneurship.
- 3%: A reduced tax rate is applied to the net profit of establishments employing part-time workers, promoting flexible employment arrangements and supporting smaller businesses.
These rates adhere to the guidelines outlined in Ministerial Resolution No. (14/2019). It incorporates all relevant amendments to ensure they are aligned with the Vision 2040 objectives.
Updated VAT Regulations
Alongside the corporate tax updates, Oman has also revised its VAT (Value Added Tax) regulations. The standard VAT rate remains at 5% and is applied to most goods and services within the country. However, specific essential goods and services are either exempted or zero-rated. It reflects the government’s focus on affordability and essential needs.
- 0% VAT: This rate applies to essential supplies such as food commodities, medicines, rescue aircraft, and key sectors like gold, silver, oil, and transportation (sea, air, land).
- Exemptions: Certain sectors are fully exempt from VAT, including financial services, local passenger transportation, residential real estate rentals, healthcare services and goods, undeveloped land, and the resale of residential properties. Education services and related goods also benefit from this exemption. Which reflects the government’s commitment to accessible education and social welfare.
Alignment with Vision 2040
These tax reforms are a critical component of Oman Vision 2040, a strategic plan designed to diversify the economy, promote sustainable development, and enhance the quality of life for Omani citizens. By implementing these tax adjustments, the government aims to create a more attractive environment for both local and international businesses, It would stimulate investments, and ensure that economic growth is inclusive.
The updated tax policies are expected to play a significant role in achieving the Vision 2040 targets, particularly in fostering a dynamic and diversified economy. As Oman continues to align its fiscal policies with long-term national goals. The country is positioning itself as a competitive and resilient economy in the global market.
