Taxes in Oman for Expats in 2026

2024 has been a breakthrough year for Oman — the Sultanate, long overshadowed by its more renowned neighbour Dubai, is now emerging as a prime destination for business relocation and capital investment.

Why has Oman become an attractive platform for real estate investment and business operations? Like Dubai, Oman encourages foreign companies to set up in its free economic zones, offers low tax rates for small businesses, exempts high-tech enterprises from corporate tax, and is fostering a promising business environment.

The Omani authorities have established a transparent tax system that is highly favourable to foreign investors. Below, we explore the key benefits of Oman’s taxation system and outline the main taxes applicable to foreign investors.

Oman Corporate Tax

Corporate tax in Oman applies to local companies, permanent establishments of foreign companies, and individuals engaged in business activities within the Sultanate.

The standard corporate tax rate in Oman is 15%, but small businesses benefit from a preferential rate of 3%.

Eligibility criteria for the preferential rate:

• a registered capital of no more than OMR 50,000 ($130,000);
• an annual revenue of up to OMR 100,000 ($260,000);
• a workforce of no more than 15 employees.

Businesses enjoying the reduced tax rate must not be involved in natural resource extraction, banking, insurance, financial, or utility services.

The following businesses are exempt from corporate tax for five years:

• agricultural enterprises;
• tourism and hospitality businesses (excluding management contracts);
• exporters of locally manufactured goods;
• fishing and fish processing companies;
• private higher education institutions operating as commercial entities.

Oil extraction and refining companies are subject to a 55% tax rate on income derived from the sale of petroleum products.

Tax Free Zones in Oman for Foreign Companies

Oman has several free zones that offer tax and other benefits to businesses operating within their territories, including duty exemptions, no minimum capital requirements, and low Omanisation quotas (the percentage of Omani employees required).

Foreign investors can establish companies in the following free zones:

• Salalah Free Zone;
• SOHAR Free Zone;
• Khazaen Economic City;
• Al-Mazunah Free Zone;
• Musandam Free Zone;
• Special Economic Zone at Duqm.

We examine the free zones offering the most favourable conditions and tax incentives for new enterprises.

SOHAR Free Zone — Oman’s Largest Port

Managed by Sohar Port Company, SOHAR Free Zone provides access to both regional and global markets.

SOHAR Free Zone offers:

• a 30% discount on obtaining a General Trading Licence (GTL);
• a 50% discount on company registration.

Investor benefits:

• 100% foreign ownership;
• corporate tax holiday for up to 25 years;
• 0% import and re-export duties;
• 0% personal income tax;
• low capital requirements;
• reduced Omanisation quotas;
• free trade agreements with the USA and Singapore.

Industrial Estates (MADAYN) — Oman’s Industrial Hub

MADAYN is a network of free zones and world-class industrial parks, including Rusayl, KOM, Raysut, Al Mazunah Free Zone, Suhar, Nizwa, Al Buraimi, Sur, Samail, Mahas, Al Mudhaibi, Ibri, Thumrait, and Al Wadi Al Khabir.

Investor benefits:

• 30-year land lease terms, renewable for an equal period;
• right to transfer lease rights;
• right to sell buildings on leased land;
• right to sublease properties to investors;
• OMR 1 annual rent per square metre for industrial projects (first five years);
• five-year corporate tax exemption for industrial projects;
• exemption from customs duties on manufacturing resources;
• up to 65% foreign workforce allowance;
• 100% foreign ownership.

Salalah Free Zone — Oman’s Future Trade and Entertainment Hub

Salalah Free Zone is one of Oman’s largest industrial and investment centres, attracting multinational corporations, regional enterprises, and local businesses.

Investor benefits:

• 100% foreign ownership;
• no import/export customs duties;
• no minimum capital investment requirements;
• 30-year exemption from corporate and dividend taxes;
• no personal income tax;
• unrestricted repatriation of capital, profits, and investments;
• flexible customs procedures;
• strategic Middle East port with world-class infrastructure;
• free trade agreements with the USA and Singapore.

VAT Tax in Oman

The standard VAT rate is 5%, though some goods and services are exempt or zero-rated.

Zero-rated goods and services:

• food products;
• medicines and medical equipment;
• investment-grade precious metals (gold, silver, platinum);
• international transport and transport within the GCC;
• oil, petroleum products, and natural gas;
• exported goods and services;
• transactions within free zones.

Mandatory VAT registration starts at a taxable turnover of OMR 38,500 (approx. $100,000), while businesses with turnover from OMR 19,250 ($50,000) can register voluntarily.

Foreign companies supplying taxable goods to non-registered clients in Oman must register for VAT, regardless of transaction volume.

Municipal Taxes in Oman

Social Security Contributions

Employers and employees in Oman must contribute to the Social Insurance Fund.

Employer contributions:

• 10.5% of Omani employees’ salaries for social security (pensions, disability benefits, etc.);
• 1% additional contribution for workplace injuries and illnesses.

Employee contributions:

• 7% of salaries for Omani employees aged 15–59 working in the private sector;
• 1% for all Omani citizens, regardless of sector.

Tourism Tax in Oman

Restaurants and cafés in designated tourist areas must charge a 4% tourism tax.

Withholding Tax in Oman on Capital Gains, Dividends, and Interest

Dividends

Dividends paid by Omani companies to resident shareholders are not subject to withholding tax.

A 10% withholding tax was abolished by a royal directive on 11 January 2023, following two previous temporary suspensions.

Interest

Interest paid to residents is not subject to withholding tax. This tax was also abolished by the royal directive.

Royalties

Non-residents without a permanent establishment in Oman who receive income from an Omani source in the form of management fees, software usage fees or rights, as well as research and development fees, are subject to a 10% withholding tax on the gross amount.

The definition of royalties includes equipment rental and payments for the use of software, intellectual property rights, patents, trademarks, and designs.

The tax is withheld by the payer in Oman and remitted to the tax authorities. Service provision is subject to a 10% withholding tax, regardless of where the services are performed.

Oman Personal Income Tax

Oman’s Real Estate Taxes

As of 2025, neither residents nor non-residents are subject to income tax or capital gains tax in Oman.

Oman is expected to introduce personal income tax, becoming the first GCC (Gulf Cooperation Council) country to do so. Since the legislation is still under discussion, the tax is likely to take effect in 2025.

Proposed tax rates range from 5% to 9% for foreign nationals, while Omanis would be subject to a flat 5% rate.

Tranio’s experts will select real estate projects for investment and relocation in Oman. Submit a request to receive a personalised consultation on promising properties in the Sultanate.

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Oman’s Double Taxation Avoidance Agreements (DTAAs)

Oman has established Double Taxation Avoidance Agreements (DTAAs) with over 35 counties including Algeria, Belarus, Brunei, Canada, China, Croatia, France, Hungary, India, Iran, Italy, Japan, South Korea, Lebanon, Mauritius, Moldova, Morocco, Netherlands, Pakistan, Portugal, Russia, Seychelles, Singapore, South Africa, Sudan, Switzerland, Syria, Spain, Thailand, Tunisia, Turkey, United Kingdom, Uzbekistan, Vietnam, Yemen.