Key takeaway: Oman's Tax Authority says Royal Decree No. 56/2025 issued a Personal Income Tax Law that will enter into force at the beginning of 2028, with a 5% rate on the taxable income of a natural person whose total income exceeds 42,000 OMR annually. The Authority's rates page lists a basic VAT rate of 5% and income tax at 15% for institutions and commercial companies. This page reports what the official pages say and does not decide anyone's tax position.

Personal income tax: issued, with a start in 2028

The Oman Tax Authority says His Majesty Sultan Haitham bin Tarik issued Royal Decree No. 56/2025 on the Personal Income Tax Law. Its page says the law has 76 articles in 16 chapters and will enter into force at the beginning of 2028. That item, dated 22-06-2025 in the news list, said the executive regulations of the law would be issued within one year from the law's publication in the Official Gazette. The Authority's Personal Income Tax Law & Regulations page, read on 7 October 2026, lists only Royal Decree 56/2025 and no executive regulation. The stated start is the beginning of 2028, so the law is not yet in force.

tms.taxoman.gov.om: Issuance of Personal Income Tax (PIT) Law tms.taxoman.gov.om: Personal Income Tax Law and Regulation tms.taxoman.gov.om: News

Who would pay, and at what rate

The Authority says the law is imposed on a natural person whose total income exceeds 42,000 OMR annually, earned from certain types of income according to conditions specified by law. Under the law, which the Authority says will enter into force at the beginning of 2028, the tax rate is 5% of the taxable income. Its FAQ defines net income as all amounts exceeding 42,000 OMR of the total income, and taxable income as net income after deducting the value of exemptions, costs, losses and exemptions approved under international agreements. The Authority says the results of an in-depth study of the economic and social impact showed that approximately 99% of the population in the Sultanate of Oman is not subject to this tax. It names education, healthcare, inheritance, zakat, donations and primary housing as examples of deductions and exemptions.

tms.taxoman.gov.om: Issuance of Personal Income Tax (PIT) Law tms.taxoman.gov.om: Personal Income Tax FAQs

Residence and income earned abroad

These answers describe the Personal Income Tax Law, which the Authority says will enter into force at the beginning of 2028. The Authority's FAQ on the law says any person who stays in Oman for more than 183 days is considered a tax resident, whether Omani or non-Omani, and that the days can be continuous or intermittent during the year. Total income means all cash amounts and in-kind benefits received by a resident taxpayer in Oman or abroad, and by a non-resident taxpayer only in Oman. A foreign tax can be deducted only if it relates directly to income sources considered taxable in Oman. The Authority's Arabic question-and-answer guide also says that a person's income earned outside Oman is exempted from the tax for a period; this page does not give the length or the conditions, so check them on the official texts before relying on them.

tms.taxoman.gov.om: Issuance of Personal Income Tax (PIT) Law tms.taxoman.gov.om: Personal Income Tax FAQs tms.taxoman.gov.om: Personal Income Tax Guidelines, questions and answers (Arabic PDF)

Income sources, withholding and the return

These answers also describe the Personal Income Tax Law, which the Authority says will enter into force at the beginning of 2028. The Authority's FAQ says salary is not the only source: there are a number of sources under the law. It says retirement pensions are one of the income sources calculated within the total income, and that income a landlord receives from renting out residential property is subject to the tax, unlike under the VAT law. Under the law, employers will be obliged to withhold the tax from the individual and remit it to the Tax Authority. The FAQ also says all residents whose total annual income exceeds 42,000 OMR shall submit the tax return. The Arabic guide says the return is submitted within six months of the end of the tax year.

tms.taxoman.gov.om: Issuance of Personal Income Tax (PIT) Law tms.taxoman.gov.om: Personal Income Tax FAQs tms.taxoman.gov.om: Personal Income Tax Guidelines, questions and answers (Arabic PDF)

Company income tax and withholding tax

The Tax Authority's rates page lists income tax at 15% of net taxable income for institutions and commercial companies, and 3% for small enterprises according to specific conditions. Its income tax FAQ says income tax applies to every commercial registration (CR), whatever its grade, and is charged on annual profits. The same income tax FAQ says withholding tax is imposed on amounts transferred to a foreign person or company that does not have a permanent establishment in Oman, for royalties, research and development, the use of computer programs, management fees and the performance of services, and gives the rate as 10% of the total amount transferred to foreign companies. These entries concern businesses and payments to foreign persons and companies.

tms.taxoman.gov.om: Tax Rate tms.taxoman.gov.om: Income Tax FAQs

VAT on everyday purchases and rent

The rates page lists a basic VAT rate of 5% applied on most goods and services. It lists a zero rate (0%) for certain goods and services, such as exports, essential goods and international transport, and exemptions for some activities, including financial services and rental of residential properties. The VAT FAQ says renting a residential property will not attract VAT, but for residential leases the lease needs to be under certain conditions, and holiday rentals, short-term leases and hotel stays will all be subject to VAT. It says VAT is generally payable on food, but certain food items will be zero-rated.

tms.taxoman.gov.om: Tax Rate tms.taxoman.gov.om: VAT FAQs

A zero-rate VAT change and excise tax

A Tax Authority news item, listed with the date 28-09-2026, says three new administrative decisions specify goods and products subject to a zero percent VAT rate. The decisions cover basic food staples, human medicines and medical equipment, as well as veterinary medicines and medical supplies. The item says the first decision repeals the previous Decision No. (65/2021). It also said the decisions would officially take effect on 1 October 2026; check the Authority's VAT pages for the current lists. The rates page lists excise tax of 100% on tobacco products, energy drinks, electronic smoking devices and vaping liquids, and 50% on soft drinks. It says excise tax is applied once, either upon import or local production.

tms.taxoman.gov.om: The Tax Authority issues three new decisions expanding the 0% VAT rate list tms.taxoman.gov.om: News tms.taxoman.gov.om: Tax Rate

What this page does not cover

This page does not cover social protection contributions for non-Omani workers, double taxation agreements, the detailed deduction rules, the filing rules for a person whose residence in Oman ends, the penalties and the withholding on payments to non-resident individuals under the personal income tax law, customs duties, or residence permits and work visas. Check the official pages for them. It is information, not tax or legal advice.

Questions before acting

When does Oman's personal income tax start?

The Tax Authority's page says Royal Decree No. 56/2025 issued the Personal Income Tax Law and that the law will enter into force at the beginning of 2028. In the item dated 22-06-2025 it said the executive regulations would be issued within one year from the law's publication in the Official Gazette; its law page, read on 7 October 2026, lists no executive regulation. This page does not decide how the law applies to any person.

What are the threshold and rate under the personal income tax law?

The Authority says the law is imposed on a natural person whose total income exceeds 42,000 OMR annually, earned from certain types of income according to conditions specified by law, and that the tax rate is 5% of the taxable income. It also says the results of an in-depth study of the economic and social impact showed that approximately 99% of the population in the Sultanate of Oman is not subject to this tax. The Authority says the law will enter into force at the beginning of 2028.

Who counts as a tax resident under the personal income tax FAQ?

The FAQ says any person who stays in the Sultanate of Oman for more than 183 days is considered a tax resident, whether Omani or non-Omani, and that the days can be continuous or intermittent during the year. It says total income of a resident taxpayer includes amounts received in Oman or abroad, and that of a non-resident only amounts received in Oman. The Authority says the law will enter into force at the beginning of 2028.

What is the VAT rate in Oman?

The Tax Authority's rates page lists a basic VAT rate of 5% applied on most goods and services, with a zero rate (0%) for certain goods and services such as exports, essential goods and international transport. A news item dated 28-09-2026 said three decisions on zero-rated goods would officially take effect on 1 October 2026.

Corrections in this revision

The previous version included statements without sufficient direct support. This revision removes or corrects:

  • Oman has no personal income tax, with a top personal rate of 25%.
  • An effective rate and net monthly pay for a €90,000 gross salary.
  • An average monthly salary in Oman of about €2,502.
  • Omanisation incentives and an income tax holiday.
  • A 3% reduced rate for small and medium companies owned and managed by locals, applied only where a company has fewer than 15 employees, income up to OMR 100,000 and operates in a few sectors.
  • Company tax paid in two instalments, with 50% of the estimated tax due within three months after the year end.
  • A requirement to keep business records for at least 10 years.
  • VAT returns due within 30 days after the end of the tax period.
  • Oman's standard customs rate of 5% of the value of most imported products.
  • Annual property tax, and possible wealth or land tax for property owners.
  • Penalties for late filing of returns and for underpayment of taxes.

Review scope: legal and financial statements in this revised article. Recheck on a provider, professional, immigration or tax-rule change; reuse of dated figures requires a new check.

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About the author

António Mira is the founder of whereTOemigrate. For over a decade he has worked at the intersection of Portuguese real estate and overseas business, helping international clients navigate the cross-border decisions that come with relocating. He sits on the board of CCIAP (Portuguese-Arab Chamber of Commerce), the Portuguese-Saudi Business Council, and the Portugal-Hong Kong Business Association — always with one focus: enabling overseas business and human mobility into and out of Portugal.

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