Amendments to Oman's Executive Regulations on Income Tax

The Official Gazette of Oman published Ministerial Decision No. 14/2019 issued by the Ministry of Finance on 10th February 2019 published the amendments to the Executive Regulations on Income Tax Law MD 30/2012. The amendments to Executive Regulation provide director remuneration, tax card system, withholding tax, donations, enterprise tax and etc.

The important amendments covered under this Executive Regulations are:

  • Withholding Tax
  • The amendments widened the categories of payments subject to Withholding Tax and now includes dividends, interest and fee for services.
  • Withholding Tax on dividends distributions would be applicable only to joint stock companies and mutual funds.
  • Withholding Tax is not applicable to dividends distributed by limited liability companies.
  • Interest
  • Member's Remuneration

The least amount of the below categories is allowed as deduction from the member's remuneration:

  • The actual remuneration paid;
  • The amount of OMR 1,500 per month per director for all companies except professional companies.
  • The amount of OMR 3,500 per month per director for professional companies,
  • 25% of taxable income before deduction inclusive of remuneration and adjusting any other tax.
  • Tax Exemption

New amendments have limited tax exemption only to companies that carry out their main activity in the manufacturing sector.

  • Tax Card System

Tax cards issued upon formal request by the taxpayer in official application format viz. Income Tax Form No. 11 introduced by the amendments. New taxpayers would be required to apply for the tax card during tax registration. The tax card shall be applicable for period of two years and renewable at end of the term. The card can be in digital or paper format.

  • Tax on Enterprises

To stimulate small business viz. medium or small enterprises the tax on enterprise shall be at rate of 0 or 3%.

  • Provision of Onsite Assessment and Examination

The amended rules provide obligations and duties of taxpayers and tax inspectors with regards to the onsite tax matters.

The above amendments are the most sought amendments as they brought clarification to tax law provisions which were implemented by the Income Tax Law (ITL) vide Royal Decree No. 9/2017. Besides, the provisions would enhance efficacy of tax administration, tax collection and stimulate economic sectors such as manufacturing and small businesses.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.