Navigating Taxation in Oman: A Guide for Businesses
Understanding the tax landscape is crucial for any investor who wants to set up a company in Oman and any company who operating in Oman, and we are here to help you demystify the process. Oman boasts a business-friendly tax regime, but it is essential to be aware of the various taxes and fees applicable to your business once registered.
Navigating Taxation Essentials for Businesses in Oman
Corporate Income Tax:
One of the advantages of doing business in Oman is the simplicity of the corporate income tax framework.
Oman’s corporate tax baseline for all companies is 15% as soon as you start making a profit. This applies for all corporates in the mainland. Exceptions are made for SMEs and for companies that are operating in the Freezones.
Bondoni can provide practical advice and introduce you to our pre-qualified partners in Oman who will provide the professional advice for the exceptions.
Value Added Tax (VAT):
Starting in 2021, Oman implemented a Value Added Tax (VAT) system with a fixed rate of 5%. This tax is levied on the majority of goods and services provided within the country, though some exemptions and zero-rated supplies exist. Bondoni offers expert assistance to businesses in maneuvering through the intricacies of VAT registration, compliance, and reporting, facilitating seamless operation within the VAT framework.
Withholding Tax:
Businesses making payments to non-residents, such as dividends, interest, royalties, and technical service fees, are subject to withholding tax in Oman. The withholding tax rates, which are normally 10%, depend on the type of payment and any relevant tax treaties.
Customs Duties:
Imported goods are subject to customs duties in Oman, which vary based on the type of product and its classification under the customs tariff. Navigating customs duties can be complex, but Bondoni can provide guidance to businesses to ensure compliance and minimize costs associated with importing goods.
Municipality Fees:
Businesses in Oman may be subject to municipality fees for various services and permits, such as trade licenses, health permits, and commercial registrations. Understanding and budgeting for these fees is essential for businesses to operate smoothly, and Bondoni can offer support in managing municipality-related obligations.
Social Protection Fund (SPF) (Ex PASI):
Employers in Oman are mandated to contribute to the Social Protection Fund (SPF), formerly known as the Public Authority for Social Insurance (PASI), on behalf of both Omani nationals and expatriate employees. These contributions, determined by employees’ salaries, are essential for providing social security benefits to the workforce. The SPF Baseline is currently 20.5% and this continues to be changeable. Bondoni stands ready to aid businesses in comprehending their responsibilities regarding SPF contributions, ensuring adherence to regulatory requirements.
Navigating taxation in Oman is essential for businesses to operate successfully and remain compliant with regulations. At Bondoni, we understand the unique challenges that businesses face in managing their tax obligations, and our team of experts is here to provide tailored solutions to meet your needs. Contact us today to learn more about how we can support your business in Oman.
