Tax in Oman
A major incentive for expats moving to Oman is the countrys tax haven status. As is common in some of the Gulf countries, income is not taxed. There are very few personal taxes in Oman, as most of the countrys tax revenue comes from corporate income. However, this is slowly changing, as the country has recently introduced sales tax on certain items, as they are trying to diversify the countrys income sources. Here is an overview of tax requirements in Oman for expats.
Income tax
There is no income tax on salaries in Oman, and this is also applicable to expats. This is common in Gulf countries, as they wish to encourage expats to live and work in the country. However, although there is no income tax, employees are expected to make contributions to social security, which is covered by the employer. Social security covers old age pensions and public services, and workplace injury coverage. Some workers can also decide to set up salary deductions to a personal pension or retirement plan, but this is optional and would not be taxed by the Omani government.
As an expat, you will not need to file any tax forms with the Ministry of Finance.
The lack of income tax and the low cost of living attracts many expats to the country. However, it is important to check to see if your home country has a taxation treaty with Oman. Currently, Oman has treaties with 28 countries. Otherwise, if you send money home, or return home after your work is complete, you may be liable for tax in your country of origin.
Stamp duty
Stamp duty is one of the few taxes that exist for individuals in Oman, and this is a 3% tax on real estate purchases within Oman. As there are many restrictions on expats purchasing property, most expats chose to rent, and are therefore not subject to stamp duty. However, if you are in a position to purchase property, take the stamp duty into account.
Other tax
You will find there are hardly any taxes levied on individuals in Oman. There is no capital gains or inheritance tax, nor annual property taxes. For most goods, there is no sales tax, or Value Added Tax (VAT), which helps to keep the cost of living low. However, the government has recently added a VAT to certain luxury goods, and on certain goods that are harmful to public health. This includes alcohol, tobacco, energy drinks, and sodas and fizzy drinks.
Corporate taxation
Most of Oman's taxation revenue comes from corporate taxation. If you are an expat who owns and operates a business in Oman, it is important to be aware of the corporate tax rates and requirements. The current corporate tax rate is 15%.
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