WITHHOLDING TAX

Any foreign resident without a permanent establishment who receives certain forms of income in the Sultanate of Oman is subject to withholding tax on the following:

  • Royalties.
  • Consideration for conduct of research and development.
  • Consideration for the use or the right to use computer software.
  • Fees for management or performance of services
  • Dividends on shares or interests

Any taxpayer, ministry, organization, public institution, other public legal entity, or other administrative unit of the State must pay or credit in the account any amounts of income mentioned above, deduct 10% of the total amount paid or credited, and submit to the Tax Authority on the form created for this purpose within a time frame no longer than 14 days following the end of the month in which the payment or the account was made. Submission of the withholding tax returns must be done through the Tax Portal.

WHT on services is in effect as of March 1, 2018, regardless of where the services are rendered—in Oman or overseas. The tax authorities had previously held the position that services fully rendered outside of Oman were exempt from WHT.

Double tax treaties (DTTs)

The table below displays the highest WHT rates made available by the Oman DTTs. Additionally, there are accords with numerous nations that have not yet come into effect.

The table summarizes the WHT rates under the Oman tax treaties that were in effect as of December 1, 2018. If the beneficial owner is a corporation that holds a specific proportion of the voting power of the distributing corporation, dividends may be eligible for a lower WHT rate under treaties. In several treaties, interest on government debt or debt backed by the government is subject to a lower WHT rate.

Dividends (a) Interest (b) Royalties Services
Foreign companies :
Non-treaty
10
10
10
10
Treaty:
Algeria
5/10
5
10
0
Belarus
5
5
10
10(d)
Brunei
5
10
10
10(d)
Canada
5/15
10
0/10(e)
0
China
5
10
10
0
Croatia
0
5
10
0
France
0
0
7
0
Hungary
0/10
0
7
0
India
10/12.5
10
15
15(d)
Iran
10
10
10
0
Italy
5/10
5
10
10(d)
Japan
5/10
10
10
0
Korea (R.O.K)
5/10
5
8
0
Lebanon
5/10
10
10
0
Mauritius
0
0
0
0
Moldova
5
5
10
10(d)
Morocco
5/10
10
10
0
Netherlands
0/10
0
8
0
Pakistan
10/12.5
10
12.5
12.5(d)
Portugal
10/15
10
8
0
Seychelles
5
5
10
10(d)
Singapore
5
7
8
0
South Africa
5/10
0
8
0
Spain
0/10
5
8
0
Sudan
5/15
0
8
0
Switzerland
0/5/15
0/5
8
0
Syria
5/7.5
10
18
0
Thailand
10
10/15
15
0
Tunisia
0
10
5
0
Turkey
10/15
10
10
0
United Kingdom
0/15(c)
0
8
0
Uzbekistan
7
7
10
0
Vietnam
5/10/15
10
10
10(d)
Yemen
5
10
10
0

(a). Under some treaties, dividends qualify for a reduced withholding tax rate if the beneficial owner corporation owns a specified percentage of the shares of the company paying the dividends or a government entity.

(b). Under some treaties, a lower withholding tax rate applies to interest if the beneficial owner is a government entity.

(c). The 15% rate applies to dividends paid from profits derived directly or indirectly from the immovable property by an investment company or investment fund the income of which is subject to favorable tax treatment.

(d). Applies to technical, managerial, or consultancy services.

(e). The 0% rate applies to literary, dramatic, and musical copyright royalties, computer software royalties, and to industrial, commercial, or scientific experience. The 10% rate applies in other cases.