Withholding Tax in Oman:
An Overview
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Withholding tax (WHT) in Oman is a mechanism by which payments made to non-residents are taxed at source—that is, the payer in Oman must withhold and remit tax to the Omani tax authority. The purpose is to ensure tax collection on income streams leaving the country, especially when recipients may not be otherwise taxable in Oman.
The principal features of Oman’s withholding tax regime (for corporate / non-resident payments) include:
| Feature | Detail |
|---|---|
|
Tax base / scope |
Tax base / scope Payments to foreign (non-resident) entities for certain categories of income derived from Oman. |
|
Key subject payments |
Royalties, consideration for R&D, payments for use of or the right to use software, management fees, and payments for services (subject to specified exclusions). |
|
Rates |
Standard withholding rate is 10% of the gross amount. |
|
Exemptions/ suspensions |
Oman has suspended withholding tax on dividends and interest paid to non-resident investors by royal directive (effective January 2023 Also, prior to that, WHT on leasing of ships, aircraft, and aircraft engines was suspended effective 29 December 2022. WHT on dividends applies only to joint stock companies, not LLCs (by OTA clarification). |
|
Timing / remittance |
The Omani payer must withhold and remit the WHT within 14 days from the end of the month in which the payment was made or credited, whichever is earlier. |
|
“Services” broadening |
As of 1 March 2018, services performed outside Oman may also be subject to WHT (i.e. the place of performance is not always the determinant). |
|
Definition of “royalty” |
The term is broadly defined to cover use of or rights to use IP, software, industrial/commercial equipment, and payments for know-how, among other uses. |
Oman Withholding Tax and Double Tax Treaties: A Comprehensive Guide for Businesses
Oman has been steadily modernizing its tax framework to align with international best practices while also safeguarding its revenue base. A key instrument in this system is Withholding Tax (WHT), which ensures that non-residents deriving income from Oman contribute to the national tax system.
At the same time, Oman recognizes the importance of attracting foreign investment. To strike this balance, the Sultanate has entered into numerous Double Taxation Agreements (DTAs), which aim to avoid double taxation and provide reduced rates or exemptions for eligible foreign investors and service providers.
This article explores Oman’s withholding tax regime in detail, its interaction with DTAs, practical implications for businesses, and compliance requirements.
| No | Countries name | Dividends (a) | Interest (b) | Royalties | Services |
|---|---|---|---|---|---|
|
1 |
France |
zero |
zero |
7 |
zero |
|
2 |
India |
10/12.5 |
10 |
15 |
15(d) |
|
3 |
Tunisia |
zero |
10 |
5 |
zero |
|
4 |
UK |
0/15(c) |
zero |
8 |
zero |
|
5 |
Mauritius |
zero |
zero |
zero |
zero |
|
6 |
Italy |
5/10 |
5 |
10 |
10(d) |
|
7 |
Pakistan |
10/12.5 |
10 |
12.5 |
12.5(d) |
|
8 |
Algeria |
5/10 |
5 |
10 |
zero |
|
9 |
Lebanon |
5/10 |
10 |
10 |
zero |
|
10 |
China |
5 |
10 |
10 |
zero |
|
11 |
Yemen |
5 |
10 |
10 |
zero |
|
12 |
South Africa |
5/10 |
zero |
8 |
zero |
|
13 |
Sudan |
5/15 |
15 |
10 |
zero |
|
14 |
Seychelles |
5 |
5 |
10 |
10(d) |
|
15 |
Singapore |
5 |
7 |
8 |
zero |
|
16 |
Thailand |
10 |
10/15 |
15 |
zero |
|
17 |
Canada |
5/15 |
10 |
0/10(e) |
zero |
|
18 |
Iran |
10 |
10 |
10 |
zero |
|
19 |
Syria |
5/7.5 |
10 |
18 |
zero |
|
20 |
Korea(R.OK) |
5/10 |
5 |
8 |
Zero |
|
21 |
Turkey |
10/15 |
10 |
10 |
zero |
|
22 |
Morocco |
5/10 |
10 |
10 |
zero |
|
23 |
Moldova |
5 |
5 |
10 |
10(d) |
|
24 |
Belarus |
5 |
5 |
10 |
10(d) |
|
25 |
Brunei |
5 |
10 |
10 |
10(d) |
|
26 |
Vietnam |
5/10/15 |
10 |
10 |
10(d) |
|
27 |
Uzbekistan |
7 |
7 |
10 |
zero |
|
28 |
Netherlands |
0/10 |
Zero |
8 |
Zero |
|
29 |
Croatia |
|
5 |
10 |
zero |
|
30 |
Japan |
5/10 |
10 |
10 |
zero |
|
31 |
Spain |
0/10 |
5 |
8 |
zero |
|
32 |
Portugal |
10/15 |
10 |
8 |
zero |
|
33 |
Switzerland |
0/5/15 |
0/5 |
8 |
zero |
|
34 |
Hungary |
0/10 |
zero |
8 |
zero |
|
35 |
Sri lanka |
7.5/10 |
10 |
10 |
10(d) |
|
36 |
Slovak |
zero |
10 |
10 |
zero |
|
37 |
Qatar |
0/5 |
zero |
8 |
8(d) |
|
38 |
Russian |
10/15 |
10 |
10 |
zero |
|
39 |
Ireland |
0/10 |
5 |
8 |
zero |
