Oman imposes various taxes on companies and businesses, each with its own set of regulations and compliance requirements. Understanding these taxes is crucial for businesses to ensure proper financial planning and adherence to local laws. Bondoni’s tax registration service is designed to streamline to stay informed about the various taxes that may apply to your business in Oman. Below is a simplified overview of the key types of taxes applicable to companies in Oman:
Corporate Income Tax in Oman
- Who is liable?: All Omani and foreign companies operating in Oman (Mainland). SME’s and companies in the freezones are exempted.
- Rate: The standard corporate tax rate in Oman is 15% on taxable income.
- Scope: This tax applies to the income earned by companies from their business activities within Oman.
Value-Added Tax (VAT)
- Who is liable?: Businesses with annual revenue exceeding the VAT registration threshold (currently OMR 38,500).
- Rate: VAT is levied at a standard rate of 5% on most goods and services.
- Scope: VAT applies to the supply of goods and services within Oman, including imports. Certain goods and services are exempt or zero-rated.
Withholding Tax
- Who is liable?: Foreign companies that earn income from Omani sources without a physical presence in Oman.
- Rate: A 10% withholding tax is applied to specific types of payments, including royalties, management fees, and dividends.
- Scope: The tax is deducted at the source by the Omani payer before remitting payments to the foreign entity.
Customs Duties
- Who is liable?: Businesses involved in importing goods into Oman.
- Rate: The standard customs duty rate in Oman is 5% on the CIF (Cost, Insurance, and Freight) value of the imported goods.
- Scope: This tax is applicable to goods entering Oman, with certain exemptions for specific products or sectors.
Municipality Fees
- Who is liable?: Businesses operating within the jurisdiction of local municipalities.
- Rate: Typically, 5% of the annual rent is charged as a municipality fee. Additional fees may apply based on the nature of the business.
- Scope: These fees contribute to the maintenance and development of municipal services and infrastructure.
Social Protection Fund (SPF) (Ex PASI)
- Who is liable?: Employers and employees in the private sector.
- Rate: Employers contribute 12.5% of the employee’s salary, while employees contribute 8%. The total contribution to the Social Protection Fund is 20.5%. Additional contributions are required for occupational injuries.
- Scope: The Social Protection Fund (formerly PASI) provides social insurance coverage, including pensions, occupational injury compensation, and other benefits for employees in Oman.
Excise Tax
- Who is liable?: Importers and producers of specific goods deemed harmful to health or the environment.
- Rate: Excise tax rates vary depending on the product, ranging from 50% to 100%.
- Scope: Products subject to excise tax include tobacco, energy drinks, and carbonated beverages.
By understanding the different types of taxes, fees, and contributions in Oman, businesses can better manage their financial obligations and avoid potential penalties for non-compliance. Bondoni’s comprehensive tax and VAT registration services help businesses navigate these complexities, ensuring they meet all regulatory requirements efficiently.
Expert Guidance
Our experienced team provides practical guidance on VAT registration requirements and procedures. We help you determine whether your business is eligible for VAT registration and advise you on the necessary steps to take.
Documentation Assistance
We advise you and your local accountant/auditor in gathering and preparing all the required documentation for VAT registration, including financial records, business licenses, and other relevant paperwork. Our team ensures that all documentation is accurate and complete, minimizing the risk of delays or errors.
Application Submission
Once all the necessary documentation is in order, we handle the submission of your VAT registration application to the relevant authorities. Our team liaises with your accountants and the Tax Authority on your behalf, ensuring that your application is processed efficiently.
Compliance Assurance
Bondoni’s VAT registration service ensures that your business remains compliant with Oman’s tax regulations. As your locally retained representative we will ensure that the regular tax payments are paid to the Tax Authorities seamlessly and on time.
Peace of Mind
With Bondoni’s expert support, you can have peace of mind knowing that your VAT registration is being handled by professionals. We take the complexity out of the process, allowing you to focus on running your business with confidence.
