Oman Tax Law Executive Regulations

Ministerial Decision No.
30/2012
Issuing the Executive Regulation of the Income Tax Law

After perusal of the Commercial Companies Law No. 4/74;
The Insurance Companies Law promulgated by Royal Decree No. 12/79;
The Law for the Organisation of Accounting and Audit Profession promulgated by Royal
Decree No. 77/86;
The Law of Foreign Capital Investment promulgated by Royal Decree No. 102/94;
The Law (System) of the Unified Industrial Organization for the Gulf Cooperation Council
Countries promulgated by Royal Decree No. 61/2008;
The Income Tax Law promulgated by Royal Decree No. 28/2009;
Ministerial Decision No. 9/83 amending the depreciation rates for solid buildings;
Ministerial Decision No. 91/84 providing rules for taxable income in respect of branches of
foreign Companies operating in the Sultanate;
Ministerial Decision No. 92/84 determining rates for sponsorship fees deductible from the
taxable income;
Ministerial Decision No. 43/86 determining the donations considered as deductible
expenses from taxable income;
Ministerial Decision No. 23/89 determining the rates for local agents commission
deductible from the taxable income for insurance companies;
Ministerial Decision No. 70/97 in determining rules governing deduction and payment of
income tax of companies ;
Ministerial Decision No. 51/98 determining rules for deducting the specified salaries for
partners and owners of companies and establishments and rents, for determining the taxable
income of companies and establishments;
Ministerial Decision No 93/2000 determining rules for deducting rent, for determining the
taxable income of companies and establishments;
Ministerial Decision No 13/2005 determining the professions that are subject to the
provisions of the Profit Tax Law on Establishments promulgated by Royal Decree 77/89;
Ministerial Decision No. 46/2005 determining the Rules and Procedures for exemption from
income tax on companies and profit tax on establishments;
The decision of the Financial Affairs and Energy Resources Council No 33/2010 issued in
the second meeting of the year 2010 held on 1 November 2010 determining the parties for
which the donations paid are considered deductible expenses for determining the taxable
income;
The decision of the Financial Affairs and Energy Resources Council No 34/2010 issued in
the second meeting of the year 2010 held on 1 November 2010 in respect of the ratification
of procedures determined for renewal of exemption from income tax for establishments and
other companies which carry on their main activity in the fields stipulated Article 118 of the
Income Tax Law;
And in view of the exigencies of public interest.
It has been decided as follows:

Article.
One:
The attached Executive Regulation of the Income Tax Law shall come into
effect.
Article.
Two:
The forms attached to this Regulation shall be considered as an integral part

thereof.
Article.
Three:
The amendment of Article Nos. (33), (87-92) and (94) of the attached Regulation
shall be upon the approval of the Financial Affairs and Energy Resources
Council.
Article.
Four:
The above Ministerial Decision Nos. 9/83, 91/84, 92/84, 43/86, 23/89, 70/97,
51/98, 93/2000, 13/2005 and 46/ 2005 referred to above are cancelled and all that
contradicts the attached Regulation or contravenes the provisions thereof shall
also be cancelled.
This Decision shall be published in the Official Gazette and shall come into force
as from the day following the date of its publication, with the exception of:
Article.
Five:
1- Article Nos. (6), (18-66), (130-132) and (134-143) of these Regulations, the
provisions of which shall apply to tax years commencing from 1 January
2012.
2- The provisions of Article Nos. (133) and (148-154) of these Regulations,
shall apply to the tax due which is payable as from the date of entry into
force of these Regulations.
Issued on: 22.02.1433 AH

Corresponding to 16/01/2012
Darwish Ismail Ali Al Balushi
Minister Responsible for Financial Affairs.
Published in the Official Gazette Edition 958 dated 28 January 2012
PART ONE
DEFINITIONS AND GENERAL PROVISIONS
Article
1:
In implementation of the provisions of this Executive Regulation, the words

and terms prescribed thereto shall have the same meaning provided for in the
aforementioned Income Tax Law. The following words and terms shall have
the meaning given against each of them, unless the context otherwise requires:
1. The Minister: The Minister responsible for Financial Affairs.
2. The Law: the aforementioned Income Tax Law.
3. The Regulation: The Executive Regulation of the Income Tax Law.
Article.
2:
Provisions of tax treatment applicable to the GCC nationals - natural or legal

persons- by virtue of the Economic Agreement signed in the meeting of the
Supreme Council of the GCC countries held during December 2001 shall be
taken into account in implementing this Regulation.
PART TWO
TAXPAYERS
CHAPTER ONE
GENERAL RULES
Article For the purposes of implementing the provisions of this Regulation, a taxpayer
refers to:
3:
1. The establishment.
2. The Omani company.
3. The permanent establishment.
Article
4:
The foreign person who does not carry on business in Oman through a
permanent establishment situated therein shall be subjected to tax in the cases
where any income has accrued to him in Oman from the following:
1. Royalties.
2. Consideration for research and development.
3. Consideration for the use of or right to use computer software.
4. Management fees
The provision of the foregoing paragraph shall also apply in case a foreign person
carrying on business in Oman through a permanent establishment does not
consider the total amount paid or credited in the accounts on which tax is charged
as part of the elements of the gross income of the establishment.
Article
5:
In considering an agent carrying on activity on behalf of a foreign person as its

permanent establishment - in implementing the provision of first paragraph of
Article (2) of the Law the following conditions should be satisfied:
1. He must be dependent on the foreign person economically and legally,
2. He must have, and must habitually exercise, the authority to act and
conclude contracts in Oman in the name of the foreign person within the
limit of the activity practiced.
3. He shall in the case of agency of a foreign insurance company- have the
authority to collect insurance premium or insure against risks.
CHAPTER TWO
PROFESSIONAL ACTIVITIES
Article
6:
In implementation of the provision of the Law and this Regulation, the following
shall be considered as professional activities::
1. All branches of Medicine.
2. Dentistry.
3. Physiotherapy.
4. Medical analysis laboratories.
5. Veterinary Medicine.
6. All branches of Engineering.
7. Engineering and architectural consultancies.
8. Accounting and auditing.
9. Advocacy and legal consultancy.
10. Administrative and economic consultancies.
11. Expertise before the courts of Law (with exception to experts affiliated to
the Experts' Department at the Ministry of Justice and experts of the
government apparatus).
12. Expertise before the administrative or other authorities.
13. Painting, photography, and sculpture.
14. Translation.
Article
7:
All ministries and government bodies which are competent to issue licenses for
practicing any of the professional activities, or to register such professions in the
records provided for in the laws and regulations thereof, shall be obliged to
submit to the Secretariat General a statement of licenses issued or registered in
the records in respect of such activities. They shall also furnish a statement of
licenses renewed, expired, cancelled, suspended, together with the reason for, and
date of, cancellation or suspension, and the period of suspension, if it is
temporary.
Article
8:
Notification to the Secretariat General - with respect to the permanent licenses

issued for professional activities, and those recorded in the register, renewed, or
expired shall be served in accordance with the provisions of the foregoing Article
(7) of this Regulation within June and December of each year, except in cases of
cancellation of registration or license, or its suspension, wholly or partly, or
discontinuation or termination of the professional activity, the notification shall
be served at the end of the month in which such cancellation, suspension,
discontinuation or termination occurred.
Article
9:
Whenever temporary licenses are issued, a notification shall be served thereupon

to the Secretariat General.
A temporary license means in implementation of the provisions of this Chapterthe license issued for a period of less than one year and not renewable.
Article
10:
The notification shall - in all cases prescribed in this Chapter- be submitted in

accordance with the Income Tax Form N 1 attached to this Regulation.
The notification shall be signed by the authorized Director General of the
concerned governmental body which is competent for issuing licenses, or by any
person acting on his behalf. It shall also be sealed by the stamp of the concerned
governmental body. The authorized Director General or the person acting on his
behalf shall be responsible for the accuracy of the information included in the
notification.
PART THREE
RULES REGULATING THE FURNISHING OF THE NOTIFICATION
PRESCRIBED IN ARTICLE (11) OF THE LAW
CHAPTER ONE
GENERAL RULES
Article
11:
The notification of the taxpayer's information as prescribed in Article (11) of the

Law shall be submitted to the Secretariat General as follows:
1. According to the Income Tax Form N (2) attached to this Regulation by
the establishment.
the Omani company.
the permanent establishment.
the foreign person providing services in Oman.
Article
12:
The notification referred to in the foregoing Article (11) shall be submitted within
three months starting from the date of incorporation or date of commencement of
business, whichever is earlier, except for the cases of provision of services for the
first time in Oman, it shall be submitted within three months from the date of
commencement of provision of such services, except where the period of
provision of services is less than three months, the notification shall be submitted
on the day following the date specified for the commencement of the provision
of services.
Article
13:
Notification of any changes of the taxpayer's information shall be submitted

within two months from the date of such changes according to Income Tax From
No. (6). attached to this Regulation.
CHAPTER TWO
REGULATIONS FOR EXCEPTION FROM SUBMITTING NOTIFICATION
Article
14:
The establishment or Omani company that meets the following conditions shall
be exempted from submitting the notification stipulated in Article (11) of this
Regulation:
1. The capital entered in the Commercial Register at the end of the three
months prescribed in Article (12) of this Regulation shall not exceed (RO
20,000) twenty thousand Omani Rials.
2. The gross income of the establishment or Omani company shall not exceedat the end of the period referred to in Clause "1" of this Article - RO
100,000, hundred thousand Omani Rials.
3. The average number of employees during the period referred to in Clause
"1" of this Article shall not exceed eight.
In calculating the average, all employees shall be considered whatever be the
nature, type, location or duration of work assigned to them, including incidental
or temporary recruitment, and whatever method adopted for determining the
wages.
Article
15:
The Secretariat General may request the establishment or Omani company which
has not submitted the notification stipulated in Article (11) of the Law to provide
any data, information, documents, records or others to ensure satisfaction of the
conditions of exception from submitting the notification within the period it
prescribed.
Article
16:
Such exception from submitting the notification shall cease to be valid when any
of the conditions for exception is not satisfied during any accounting period.
Article
17:
The establishment or Omani company that satisfies the conditions for exception
shall be obliged to submit the notification in the following two cases:
1. Abstention from responding to the Secretariat General's request as per
Article (15) of this Regulation.
2. Occurrence of any event resulting in non-fulfillment of any of the conditions
for exception during any accounting period; in such case, the notification
shall be submitted within 15 days from the end of that accounting period.
PART FOUR
RULES REGULATING THE DEDUCTION OF EXPENSES IN COMPUTATION
OF TAXABLE INCOME
CHAPTER ONE
GENERAL RULES FOR THE DEDUCTION OF EXPENSES
Article
18:
In deducting expenses from the gross taxable income for any tax year, the
following conditions shall be fulfilled:
1. The expenses shall be real and shall have actually been incurred.
2. The expenses shall be related to the taxpayer's activity.
3. Expenses shall not be deducted unless so much as is attributable to the
purpose of the production of gross income.
4. The expenses shall be entered in the accounting records and books required
by law to be kept by the taxpayer and shall be proved by supporting
documents, except those expenses that are not customarily proven with
documents issued by the person dealing with the taxpayer.
5. In the cases where expenses represent a value of services rendered to the
taxpayer, such expenses shall be proportional to the value of services
rendered- as shall be decided by the Secretariat General.
6. The expenses shall not be any of those disallowed by the Law to be
deducted from the gross income.
CHAPTER TWO
RULES FOR DEDUCTING AMOUNTS PAID AS CONTRIBUTION
TO PENSION FUNDS
SECTION ONE: CONDITIONS FOR DEDUCTING CONTRIBUTIONS
PAID TO FUNDS SET UP IN OMAN
Article
19:
In order to deduct the amounts of contribution paid to pension funds set up in

Oman, the following conditions shall be met:
1. The pension fund shall be independent from the taxpayer and the fund's
money shall be separate from the taxpayer's money and invested for the
fund's own account.
2. The amounts paid as contributions to the pension fund shall be calculated in
accordance with the rules and regulations adopted by the fund.
3. The taxpayer shall submit to the Secretariat General copies of the following:
a) Rules and regulations of the fund as well as the license issued thereto.
b) The fund's financial accounts and statements- certified by an auditor
legally licensed to practice accounting and auditing profession in Oman.
SECTION TWO: CONDITIONS FOR DEDUCTING CONTRIBUTIONS

PAID TO FUNDS SET UP OUTSIDE OMAN
Article
20:
Deduction of amounts of contribution paid to pension funds set up outside Oman

shall be allowed if the following: conditions are satisfied:
1. The fund should have been established in accordance with the laws and
rules applicable in the country in which it was established.
2. The pension fund shall have rules or regulations or specific regulations that
the taxpayer undertakes to adhere to , including the following:
a) The fund shall be licensed to run a social security plan for the taxpayer's
employees.
b) Resources of the fund shall mainly consist of the contributions deducted
from the monies of the taxpayer's employees and the contribution paid
by the taxpayer- in his capacity as an employer.
c) The amounts paid by the taxpayer as contribution to the plan run by the
pension fund- shall be in return for a commitment on the part of the fund
to pay the periodical salaries or the end-of-service benefits for the
taxpayer's employees at the end of the service or for their beneficiaries
in case of death.
d) The fund with its monies and investments shall be independent from the
taxpayer and its monies shall be separate from the taxpayer's monies and
invested for the fund's own account.
3. The taxpayer shall submit to the Secretariat General certified copies of the
following:
a) The license issued to the pension fund, provided it shall be valid during
the tax year in which the contribution is due.
b) The social security plan administered by the fund.
c) The rules and regulations of the setting up and managing of the fund.
CHAPTER THREE
RULES FOR DEDUCTING AMOUNTS
PAID TO PROVIDENT FUNDS
Article
21:
Deduction of amounts that the taxpayer- in his capacity as an employer, is obliged

to pay to the provident fund set up by an establishment or an Omani company or a
permanent establishment, as per Article 44 of the aforementioned Labour Law
promulgated by Royal Decree no. 35/ 2003, shall be allowed, if the following
conditions are satisfied:
1. The fund shall be registered at the Ministry of Manpower.
2. The taxpayer- in his capacity as an employer- shall be obliged pay to the
fund- as per the accredited internal regulations- amounts to the account of
the employee provided that payment of such amounts shall entail legal
commitment on the part of the employer to pay the end-of-service
allowance.
CHAPTER FOUR
RULES AND CONDITIONS FOR DEDUCTING BAD DEBTS
Article
22:
Deduction of bad debts during any tax year shall be in according with the
following conditions:
1. The debt shall have arisen due to transactions carried out by the taxpayer in
relation to its business thereof which are for the purposes of production of
gross income.
2. The amount of debt shall have already been included in the accounting
records and books that the taxpayer is obligated by law to keep.
3. The taxpayer shall have adopted the procedures required by law for the
collection of debt as per Articles (23) or (24) of this Regulation and failed
to collect the entire or part of the amount of such debt.
Article
23:
The following are the procedures required by Law for the collection of debts:
1. Issuance of a final judgment obliging the debtor to pay the debt to the
taxpayer.
2. Issuance of an order for the payment of the debt by a competent judge in
favor of the taxpayer.
3. Proof of the debt due to the taxpayer in the procedures of inventory and
liquidation of the debtor's estate- in the event of his death- before a
competent court of Law.
4. Claim for the debt by the taxpayer before the liquidator- in the case of
dissolution and liquidation of the indebted company.
5. Adoption by the taxpayer of the procedures required for the claim and final
acceptance of the debt before a bankruptcy receiver- in the event of a
judgment declaring the debtor's bankruptcy.
6. Involvement of the taxpayer in a judicial reconciliation or reconciliation
with the debtor by abandoning the debt due from the debtor, in the event of
a judgment issued declaring his bankruptcy, and endorsement of such
reconciliation.
7. Adoption of the procedures required for realization of the debt- in the event
of a judgment issued to initiate reconciliation procedures for prevention of
bankruptcy before the magistrate.
8. Any other procedure deemed by Law to have a similar effect to the
procedures referred to in the foregoing Clauses.
Article
24:
Any legal action taken by the taxpayer to claim his debt against the debtor shall
be considered as part of the legallyrequired procedures to collect the debt, in the
following circumstances and conditions
1. The debt shall be acknowledged and undisputed- both in maturity and in
amount.
2. Abstention from repaying the debt shall be attributed to the debtors
inability to repay.
3. The value of the debt shall not exceed RO 1,500 (One thousand five
hundred Rials Omani).
4. Claim for the debt shall be explicit and firm.
5. Seriousness of the procedure shall be proved by official documents and
records submitted by the taxpayer according to rules issued by the Secretary
General.
Article
25:
Any debt considered as bad during any tax year according to any procedure of
waiver or reduction or settlement of the amount of the debt as agreed with the
debtor, shall be allowed as deduction for that tax year, provided that the
procedure is proven by documents and official records submitted by the taxpayer
according to the rules issued by the Secretary General.
Article
26:
Debt shall not be considered as bad in the following two cases:

1. If it has resulted from transactions carried out by the taxpayer for the
production of a tax-exempt income, either in implementation of the
provisions of this Law or any other laws.
2. If it has resulted from transactions made by the taxpayer with a related
person, under the provision of Article (125) of the Law, unless the taxpayer
had adopted any of the procedures prescribed in Article (23) of this
Regulation.
Article
27:
Without prejudice of the provision of Clause (2) of Article (37) of the Law, bad
debts collected during any tax year shall be considered as part of the taxpayer's
gross income.
CHAPTER FIVE
RULES FOR DEDUCTING SPONSOR'S FEES
Article
28:
A sponsor means, for the purposes of the provisions of Clause (9) of Article (55)
of the Law, a person with whom a foreign company enters into a contract to carry
on its businesses in Oman
Article
29:
When deducting the sponsor's fees from the gross income of a foreign company
which carries on its businesses in Oman, the following conditions shall be
considered:
1. The sponsorship relation between the two parties shall be permanent under
a documented contract specifying mutual rights and liabilities.
2. The permanent establishment shall have actually incurred the fees during
the tax year in which such fees were paid or payable.
3. The fees shall be limited to the amounts, however named, that the sponsor
receives in that capacity and shall not include any amounts, commission
paid or payable thereto in exchange for the supply of merchandises or goods
or services to the permanent establishment.
The fees that the sponsor has actually received shall be deducted at not more than
5 % of the taxable income, calculated before deducting the sponsor's fees and
after deducting the losses brought forward from preceding years
Article
30:
The provisions of this Chapter shall not apply to the taxpayers in the field of oil
exploration.
CHAPTER SIX
RULES FOR DEDUCTING COMMISSIONS OF THE AUTHORIZED AGENT
Article
31:
In implementing the provisions of this Chapter, an authorized agent means any

person who regularly and independently carries on agency business in the
management of insurance operations and is authorized by the foreign insurance
company to carry on insurance operations on its behalf according to the contract
concluded between them as per the aforementioned Insurance Company Law, and
in particular:
1. Direct management of the agency, including conclusion of insurance
policies and signing them, fixing the prices and categories, collecting
premiums and settling claims; provided that the agent bears all expenses
required, including the wages of the agency's employees.
2. Keeping of books and records prescribed in the aforementioned Insurance
Companies Law as well as the decisions issued to implement it.
3. Representing the foreign company before the competent Omani authorities.
Article
32:
When determining the taxable income of any foreign insurance company

operating in Oman through an authorized agent, the following shall be
considered:
1. The foreign company and the authorized agent shall abide by the
obligations set under the aforementioned Insurance Companies Law.
2. No amount exceeding 25 % of the net premiums collected shall be deducted
against the commission received by the agent.
CHAPTER SEVEN
RULES FOR THE DEDUCTION OF DONATIONS
Article
33:
The following donations shall be deducted in determining the taxable income for
any tax year:
1. Amounts paid by the taxpayer to Ministries, government units,
municipalities, public organizations or other units of the State
Administrative Apparatus, on the occasion of the National Day, Eids or
religious events, or as contributions to charitable actions or projects, or to
public utility projects, or to the construction or maintenance of mosques
supervised by the Ministry of Endowments and Religious Affairs or to other
purposes.
2. Donations made to non-governmental charitable organizations as well as to
the societies recognized under the Non- Governmental Societies Law,
promulgated by Royal Decree N 14/2005.
3. .Donations paid out to private bodies working in the sports field, recognized
under the Law of Private Bodies Working in the Sports Field, promulgated
by Royal Decree N 81/2007.
In all cases, the aggregate amount of donations exceeding 5% of the gross income
of the taxpayer for the relevant tax year shall not be allowed as deduction.
CHAPTER EIGHT
RULES FOR THE DEDUCTION OF RENTS OF REAL ESTATES AND SHOPS
Article
34:
In deduction of the rent of real estates and shops occupied by the taxpayer to
carry on its business, there shall be taken into consideration the registration of the
rent contracts under the provisions of the Royal Decree N 6/89 regarding the
organization of the relationship between owners and tenants of housing units and
commercial and industrial shops and the rents contracts thereto.
Article
35:
The taxpayer shall attach with the final return a statement specifying details of
the premises leased to carry on activity, the nature of such premises, the rent
fixed to each, the name and address of the lessor and the date of registration of
their contracts. The principal officer shall sign such statement.
Article
36:
The provisions of this Chapter shall not apply to the real estates occupied by an
establishment and registered in the name of its owner.
CHAPTER NINE
RULES FOR DETERMINING THE INTEREST ON LOANS THAT MAY BE

DEDUCTED FORM GROSS INCOME
SECTION ONE: GENERAL RULES
Article
37:
The provisions of Articles from (38) to (45) of this Regulation shall apply to
determine the interest on loans which may be deducted in determining the taxable
income for any tax year in the cases where the taxpayer is related to the lender in
accordance with Articles (132) and (133) of the Law.
SECTION TWO: INTEREST ON LOANS THAT MAY BE DEDUCTED IN

DETERMINING THE TAXABLE INCOME OF ANY ESTABLISHMENT
Article
38:
The following are the conditions to be fulfilled in deducting interest on loans as

per paragraph (1) of Article (61) of the Law:
1. Interest shall be payable on loans allocated to the establishment by its
proprietor or by any other person controlled by the proprietor according to
Articles (132) and (133) of the Law.
2. The lender shall have obtained the loan from the banks registered in Oman.
3. The establishment shall utilize the loan for the sole purpose of carrying on
the activity and not to finance or raise the capital.
4. The borrowing establishment shall bear the interest on behalf of the lender.
SECTION THREE: INTEREST ON LOANS THAT MAY BE DEDUCTED IN

DETERMINING THE TAXABLE INCOME OF ANY OMANI COMPANY- OTHER
THAN BANKS AND INSURANCE COMPANIES
Article
39:
Owner's equity rights means- in implementing the provisions of this Section- the
rights of shareholders or partners in the company, which include the following:
1. Paid- up capital (including share premium)
2. Legal reserve.
3. Retained profits as per the certified accounts and financial statements of the
company including general reserve.
Owner's equity rights shall be calculated on the basis of the aggregate average of
the elements included under the rights during the relevant accounting period. The
average should be calculated by dividing the aggregate value of each element- at
the beginning and at the end of that accounting period- by two.
Article
40:
The value of loans due shall be computed- in implementing the provisions of

Articles (41-43) of this Regulation- on the basis of the aggregate average of the
loans balances due from, and unpaid by, the company at the beginning and at the
end of the accounting period- whatever types the loans may be- after excluding
the interest- free loans.
The aggregate average of the loans balances shall be determined from the
company's certified accounts and financial statements.
Article
41:
The value of the interest incurred by the company as shown in its certified
accounts and financial statements may be deducted if the value of loans due from
the company during any accounting period does not exceed twice the value of the
owner's equity rights during that period. .
Article
42:
In the event the value of loans due from a company during any accounting period
exceeds twice the value of the owner's equity rights during that period, interest
shall be calculated on the basis of multiplying the value of interest incurred by the
company as per its accounts and certified financial statements by the result
obtained from the division of twice the owner's equity rights by the loans value.
Article
43:
Deduction of the interest from the gross income in the following two cases shall
be as follows:
1. If the value of interest -which is calculated under Article (42) of this
Regulation- does not exceed the value of interest calculated on loans in
which the lender is not related to the company as per the provisions of
Articles (132) and (133) of the Law, no interest shall be deducted from the
gross income as per Clause (2) of Article (61) of the Law.
2. If the value of interest - calculated under Article (42) of this Regulation exceeds the value of interest calculated on loans in which the lender is not
related to the company as per the provisions of Articles (132) and (133) of
the Law, only the amount of the difference or excess shall be deducted from
the company's gross income, in implementing Clause (2) of Article (61) of
the Law.
SECTION FOUR: INTEREST ON LOANS THAT MAY BE DEDUCTED WHEN

DETERMINING THE TAXABLE INCOME OF ANY PERMANENT
ESTABLISHMENT
Article
44:
There shall not be deducted the amounts allocated by the permanent

establishment of any bank as interest on loans provided by the Head Office or any
other person controlled by the owner of the permanent establishment, unless the
loan has been concluded in accordance with arrangements agreed upon between
the establishment and the Head Office. Such arrangements shall be assumed to
have been made between two juristic persons; each is independent from the other.
The loan shall not be utilized for the purpose of financing or raising the capital of
the establishment specified in Article 60 of the Banking Law promulgated by
Royal Decree No 114/2000.
Article
45:
Any permanent establishment- other than banks- may deduct the amounts
allocated as interest for a loan that its head office concluded with a third party for
the benefit of the establishment, provided that the loan has been utilized to
finance the expenses of the permanent establishment to carry on its activity, and
that the lender is not related to the Head Office of the permanent establishment,
in pursuance of the provisions of Articles (132) and (133) of the Law.
CHAPTER TEN
RULES FOR DEDUCTING THE AMOUNTS CONSIDERED AS EXPENSES
UNDER ARTICLE (64) OF THE LAW
SECTION ONE: REMUNERATIONS OF CHAIRPERSONS AND MEMBERS IN
BOARDS OF DIRECTORS OF JOINT STOCK COMPANIES
Article
46:
When computing the taxable income for any Omani shareholding company,
deduction of remunerations and allowances of the company's chairperson and
members of the board of directors as well as the meetings' attendance allowances
for the board and its sub-committees shall be granted to the limits prescribed in
Article 101 of the aforementioned Commercial Companies Law.
SECTION TWO: SALARIES PAYABLE TO OWNERS OR PARTNERS OF

ESTABLISHMENT OR OMANI COMPANY IN RETURN FOR MANAGEMENT
Article
47:
When computing the taxable income for any tax year of any establishment or
Omani company such as general partnership, limited partnership or joint venture
or limited liability companies, there shall be allowed as deduction the salaries
and alike wages allocated for the proprietor or partners in return for management
of the establishment or the company in accordance with the following conditions:
1. In determining the status of the director of the Omani company- except joint
venture, the terms specified in the company's contract of incorporation or in
any other contract entered into, pursuant to the provisions of the
aforementioned Commercial Companies Law, and registered in the
Commercial Register shall be taken into consideration.

2. The owner of the establishment or partners must be engaged in the
company's management on full time basis and that he shall not be engaged
in a work relationship with any other unit or organization.
Article
48:
In implementation of the provisions of this Section, there shall be treated as

salaries: the wages, increments, bonuses, allowances, commissions, fringe
benefits, shares in profits and other amounts due whether periodical or nonperiodical - to the owner of establishment or partners in return for its
management including the value of any benefits in kind such as accommodation,
water, electricity, telephone, means of transportation, medical treatment etc,
provided by the establishment or the company to the owner or the partners.
Article
49:
Deduction of salaries and the-alike wages shall be made in accordance with the
following limits:
1. In respect of the companies that do not practice professional activities:
deduction shall be allowed to the salaries and the alike wages due for the
establishment's owner or partners in an accounting period as specified in the
contract, or to an amount of RO (1,000) per month -whichever is lessfor
the period of his presence during that accounting period.
In all cases, no deduction shall be allowed to any salaries and the alike
wages either for the establishment's owner or for each of the partners
individually, or for all partners engaged in the management on full time
basis- for any tax year- to an extent exceeding 10% of taxable income for
that tax year before deducting the salaries and the-alike wages as well as the
losses brought forward from previous tax years.
2. In respect of the establishments and companies carrying on the professional
activities: a deduction shall be allowed to the salaries and the-alike wages
due to the establishment's owner or partner in an accounting period as per
the contract or to an amount of RO (3,000) per month -whichever is lessfor the period of his presence during that accounting period.
In all cases, no deduction of any salaries and the- alike- whether for the
establishment's owner or for each of the partners individually or for all
partners engaged in the management on full time basis full time managing
partners- for any tax year- shall be allowed to a limit exceeding 30% of the
taxable income of that tax year before deducting the salaries and the alike
wages as well as the losses brought forward from previous tax years.
Article
50:
Where a partner runs more than one establishment or company, or runs a

company with an establishment owned by him, deduction of salaries and like
wages shall be allowed for any tax year from the taxable income of the company
or an establishment selected by the proprietor or the partner, provided that such
he shall notify the Secretariat General of the name of the company or
establishment of his choice at the time of filing the final return of income of that
tax year. In case of failure to serve such notification within the period specified
above, the Secretariat General may choose the company or establishment from
whose gross income such salaries and like wages will be deducted.
SECTION THREE: AMOUNTS DUE IN RETURN FOR UTILIZATION BY AN

ESTABLISHMENT OF REAL ESTATES REGISTERED IN THE NAME OF ITS
OWNER
Article
51:
In computing the taxable income of an establishment, deduction of the amounts

due for the utilization by such establishment of any real estate registered in the
name of its owner shall be allowed as per the following conditions:
1. The real estate shall be registered in accordance with the Land Registry
System, promulgated by the Royal Decree N 2/98.
2. The establishment shall have utilized the real estate in the accounting period
for the purpose of carrying on its business.
3. The amount to be allowed for deduction from the gross income of
establishment shall not exceed 4% per annum of its cost. The calculation of
the cost shall be in accordance with the provisions of Article (58) of the
Law.
4. The period of utilization of the real estate by the establishment shall not
exceed 25 years from the date of its purchase or construction.
5. Where the establishment utilizes part of the real estate for the purpose of
carrying on business, deduction shall be limited only to that part of the real
estate occupied for such purpose.
CHAPTER ELEVEN
RULES FOR DEDUCTING THE HEAD OFFICE EXPENSES
Article
52:
Provisions of this Chapter shall apply to any permanent establishment, except

those engaged in petroleum exploration activity.
Article
53:
Gross income means- in implementation of the provisions of this Chapter

regarding permanent establishments of foreign insurance companies licensed by
the Capital Market Authority under the aforementioned Insurance Companies
Law- the total amount of premiums collected after excluding the premiums paid
for reinsurance.
Article
54:
When computing the taxable income of a permanent establishment, the Head

Office expenses shall not be allowed for deduction if the activity carried on
during the tax year by such Head Office in respect of the permanent
establishment is limited to supervision and control.
Where a permanent establishment has more than one Head Office, the provision
of this Article shall apply to each Head Office separately.
Article
55:
If a reduction is made to the head office expenses under the provisions of Article
(126) of the Law, there shall be only considered- for the purposes of this Chapterthe expenses after such reduction.
SECTION TWO: EXPENSES INCURRED BY THE HEAD OFFICE SOLELY FOR

THE ACCOUNT OF THE PERMANENT ESTABLISHMENT IN OMAN
Article
56:
When determining the taxable income of an establishment for any tax year,
deduction of the expenses incurred by the head office, solely for the account of
the permanent establishment in Oman, shall be allowed as follows:
1. The expenses are for the purpose of the production of gross income of the
permanent establishment and are wholly incurred for the production of that
income.
2. They are recorded in the certified accounts and financial statements of the
permanent establishment and supported by documents.
SECTION THREE: EXPENSES INCURRED BY THE HEAD OFFICE FOR THE

ACCOUNT OF A PERMANENT ESTABLISHMENT IN OMAN AND OTHER
ESTABLISHMENTS
Article
57:
Without prejudice to the provisions of Articles (56) and (59) of this Regulation,
in deducting the expenses incurred by the head office during any tax year for the
account of a permanent establishment in Oman and other establishments for
determining the taxable income of the permanent establishment for any tax year,
where the part of the aforementioned expenses attributable to that establishment
or its share cannot be identified, the deduction shall not exceed 3% of the gross
income of the permanent establishment during that that tax year. The
percentage specified in the foregoing paragraph shall be increased as follows:
1. 5% of the of the permanent establishment's gross income in the case of

banks and insurance companies.
2. 10 % of the permanent establishment's gross income in the case of major
industrial companies using modern and sophisticated means of productivity
or adopting scientific research methods or offering technical assistance or
using patents that require exchange of information and technical expertise
with the industrial company or any person related to it.
Article
58:
In determining the taxable income of a permanent establishment for any tax year,
the head office expenses shall not be deducted under Article (57) of this
Regulation if the expenses incurred by the head office during that year have
previously been deducted in implementing Article (56) of this Regulation.
Article
59:
In no circumstance- in determining the taxable income of a permanent for any tax

year under Article (57) of this Regulation- shall an amount exceeding the amount
entered in the permanent establishment's accounts and certified financial
statements for that year be allowed as deduction against the Head Office
expenses.
Article
60:
Where the head office has supplied commodities or provided services for the
benefit of its permanent establishment in Oman and the expenses thereto have
been deducted under Article (56) of this Regulation, no expense incurred by that
permanent establishment for such commodities or services shall be deducted in
determining the taxable income of that permanent establishment.
PART FIVE
RULES FOR DETERMINING EXPENSES RELATING TO CAPITAL ASSETS
LEASED UNDER FINANCE LEASE
CHAPTER ONE
GENERAL RULES
Article
61:
For the purposes of implementing the provisions of this Part- finance lease
means any contractual arrangements under which a person (in his capacity as a
lessor) acquires the ownership of capital assets with the intent to lease to another
person (lessee) in return for the payment of rental for an agreed period, provided
that such contractual arrangements are treated as finance lease in the accounts
prepared in accordance with International Accounting Standards.
In identifying the capital assets, for the purpose of implementing the provisions of
this Part, the provisions of Article (77) of the Law shall be taken into account.
CHAPTER TWO
EXPENSES OF A LESSOR OF CAPITAL ASSETS
Article
62:
A lessor shall not- when determining taxable income- deduct sums corresponding
to the depreciation on capital expenditure he incurred to acquire ownership of the
financial leased assets.
Article
63:
The following shall be taken into account when implementing the provisions of
this Chapter:
1. The lessor and the lessee shall be considered to have a lender- borrower
relationship.
2. The unpaid amount of the loan- at any time- shall be considered equal to the
net value of investment in capital assets thereupon as at that date, on
condition that balance is recorded in the lessor's accounts according to
international accounting standards.
3. Interest on loans- during any tax year- shall be deemed as revenues or
income from lease, provided that interest is allocated in the accounts of the
lessor according to international accounting standards.
4. In the event of any profit or loss recognized as the result of sale at the
inception of the finance lease contract, International accounting standards
shall be applied in determining the taxable income of the lessor for the tax
year in which the profit or loss is entered.
CHAPTER THREE
EXPENSES OF A LESSEE OF CAPITAL ASSETS
Article
64:
For the purposes of implementing Chapter Three of Part Three of the Law, the
expenses that the lessee is considered to have incurred shall be determined as
follows:
1. The amount entered in the lessee's registers as assets at the start of the
leasing contract- on condition such entry is made according to international
accounting standards.
2. The expenses assumed to be incurred at the time a lessee realizes revenues
from the finance lease.
Article
65:
The following shall be considered in implementing the provisions of this section:

1. The lessor and the lessee shall be considered to have a lender- borrower
relationship at the start of leasing.
2. The unpaid balance of the loan- at any time- shall therein be considered
equal to the liability at that time as recorded in the lessee's accounts
according to international accounting standards.
3. Interest on loan- during any tax year- shall be considered as the cost of
leasing payable as per the leasing contract, provided that interest in the
lessee's accounts is allocated according to international accounting
standards.
Article
66:
It shall be considered an act of disposal, in implementing the provisions of

paragraph (4) of Article (77) of the Law, when the lessee ceases to be entitled to
the revenues from the finance lease without acquiring the ownership of the capital
asset. For determination of the disposal value of the asset, following gross
amounts shall be taken into account::
1. Expenses deemed to have been incurred on the asset at the inception of lease
to the extent it has not actually been borne by the lessee
2. Compensation and insurance fees due to the lessee in case of losses or
damages caused to his rights as prescribed in the leasing contract.
PART SIX
TAX-EXEMPTION
CHAPTER ONE
CONDITIONS, RULES AND PROCEDURES OF EXEMPTION GRANTED TO
ESTABLISHMENTS AND OMANI COMPANIES CARRYING ON SHIPPING
ACTIVITIES
Article
67:
Exemption of establishments and Omani companies carrying on shipping activity

is granted if the following conditions are fulfilled:
1. The establishment shall be owned by an Omani natural person.
2. The Omani company shall be established according to the provisions of the
aforementioned Commercial Companies Law, or any other law.
3. The establishment or Omani company shall be registered at the Ministry of
Commerce and Industry; and shall take Oman as a main center for its
management or operations.
4. The establishment or Omani company shall carry on activity of transport
by sea of cargo, passengers, mail, or baggage or other items, including
lease or rental of ships fully equipped, manned, and supplied or any other
closely related and undivided activity as decided by the Secretary General.
5. Carrying on the activity shall be licensed by a competent Ministry.
6. Ships used in carrying on shipping activity shall be registered according to
the provisions of the aforementioned Maritime Law and other valid laws,
rules and regulations.
Article
68:
Exemption shall be limited to the income exclusively derived by the

establishment or Omani company from carrying on shipping activity.
Article
69:
The establishment or Omani company shall submit to the Secretariat General

official documents proving compliance with the legallyrequired conditions for
exemption, and in particular:
1. Documents related to the incorporation, identification of the main activity,
Article of Association or the contract of incorporation of the Omani
company.
2. Documents related to the formation and identification of the main activity of
the establishment.
3. License to carry on activity issued from concerned ministry.
4. The date of commencement of activity.
The exemption application shall be submitted according to the Income Tax Form
N (7) attached to this Regulation.
Article
70:
The Secretariat General shall examine the application to determine compliance

with the legallyrequired conditions for exemption and the income exempted.
Exemption shall only start from the date of fulfilling the legallyrequired
conditions or the date on which the establishment or Omani company commences
activity- whichever is earlier.
The findings of the Secretariat General shall be submitted to the Minister for
approval.
Article
71:
The establishment or Omani company shall furnish to the Secretariat General the
following:
1. A copy of the annual accounts and financial statements along with the
auditor's report within six months following the end of the financial year for
which accounts and statements are prepared.
2. Any decision that may be issued by competent authorities to suspend or
cancel the company's license or to terminate its activities.
CHAPTER TWO
CONDITIONS, RULES AND PROCEDURES OF EXEMPTION GRANTED TO A
FOREIGN PERSON CARRYING ON ACTIVITIES OF SHIPPING OR AIR
TRANSPORT
Article
72:
Exemption of the foreign person carrying on activity in the field of shipping or air
transport is granted if the following conditions are fulfilled:
1. The foreign person shall carry on shipping or air transport activities in
pursuance of the laws and regulations in force in the country of
incorporation in which his administrative headquarters shall be based.
2. The person shall carry on activities in Oman through a permanent
establishment.
3. The permanent establishment shall be registered in Oman in accordance
with valid laws and regulations, and shall be licensed by competent
authorities to carry on the activity.
4. Ships or aircrafts used in carrying on the activity shall be registered
according to laws and regulations in force in the person's country of
incorporation; provided that necessary licenses, permits, certificates,
documents and papers have been obtained as per the aforementioned laws
and regulations as well as Omani laws and regulations.
5. Laws in force in the juristic person's country of incorporation or the State
governing and administering its activity or the State of which he is a
national, shall grant exemption from income tax to foreign shipping or
airline companies therein, provided that they carry on activities through a
permanent establishment.
Article
73:
The exemption stipulated in the foregoing Article (72) shall exclusively apply to
income derived by a permanent establishment in Oman from the operation of
ships or aircraft in international traffic between places not solely located within
Oman by transporting passengers, cargo, baggage, mail or other items, including
leasing or renting of ships fully equipped, manned and supplied. The exemption
shall also apply to the income generated from the sale of tickets and other similar
documents, and any other income which is closely and inseparably linked thereto,
as decided by the Secretary General
Article
74:
The person shall submit an application bearing official documents proving

satisfaction of the conditions of exemption, and in particular:
1. Compliance with valid laws and regulations in practicing international
marine or air transport activities in the country where such activities are
incorporated.
2. Registration of the permanent establishment in Oman as well as the
licenses for carrying on the activity.
3. Reciprocal exemption for Omani marine or air company transport from
income tax imposed in the State where the person's activity has been
incorporated, or in the State where his activity is administered and
controlled, or in the State of which the natural person is a national, if an
activity is carried on therein through a permanent establishment.
4. The date of commencement of activity in Oman.
The application for exemption shall be submitted according to the Income Tax
Form N (8) attached to this Regulation.
In all cases, all signatures placed in the documents submitted from a foreign
State shall be attested by the Ministry of Foreign Affairs of that State and the
Omani Embassy therein. All such documents shall be accompanied with certified
translation in Arabic.
Article
75:
The Secretariat General shall examine the official documents submitted by the
person to ensure fulfillment of legallyrequired conditions for exemption and to
determine the income to be exempted.
The exemption shall commence on the date on which fulfillment of legallyrequired conditions for exemption is confirmed, or the date on which the person
commences activity, whichever is the earliest.
The findings of the Secretariat General shall be submitted to the Minister for
approval.
Article
76:
The foreign person shall undertake to notify the

following:
Secretariat General the
1. Official documents proving fulfillment of the condition stipulated in Clause

(3) of Article (74) of this Regulation. Notification shall be furnished within
the last month of each year.
2. Copies of the company's annual accounts and financial statements along with
an auditor's report, within six months following the ending date of the
financial year for which the accounts and statements are prepared.
3. Any decision issued by the competent authority of the state in which such
person was incorporated to stop carrying on the activity, or to cancel,
withdraw, or terminate the license issued to that person.
CHAPTER THREE
CONDITIONS, RULES AND PROCEDURES OF THE EXEMPTION GRANTED
TO INVESTMENT FUNDS
Article
77:
Exemption to investment funds set up in Oman shall be granted upon meeting

the following conditions:
1. The fund shall have been established according to the provisions of the
Capital Market Law, promulgated by RD No 80/98, whether the fund has
independently been established as a shareholding company or as affiliated
to a commercial bank or an investment company.
2. The fund shall legally be licensed by the Capital Market Authority and
registered thereto.
Article
78:
Exemption to investment funds set up outside Oman shall be granted upon

fulfilling the following conditions:
1. The fund shall be established according to the valid laws and regulations in
the country of its incorporation and shall obtain the necessary licenses to
carry on activities.
2. The principal objective to establish the fund shall be to create or manage the
portfolios of securities on account of investors.
3. It shall be licensed by a competent authority in the country of its
incorporation to trade in foreign securities
4. The fund shall be licensed by the Capital Market Authority to trade in
Omani Securities registered at Muscat Securities Market.
5. The fund shall carry on activity in Oman through a permanent establishment.
Article
79:
The investment fund shall submit to the Secretariat General a copy of its Article
of Association and official documents proving eligibility for exemption and the
date of commencement of activity.
The application shall be submitted according to the Income Tax Form N (9)
attached to this Regulation.
Compliance with the provisions of last paragraph of Article (74) of this

Regulation shall be observed for funds established abroad.
The Secretariat General shall examine the application and decide on the grant of
the exemption as described in Article (75) of the Regulation.
Article
80:
The investment fund shall commit to notify the Secretariat General of the
following:
1. A copy of the annual financial accounts and statements and the auditor's
report within six months following the end of the financial year for which
accounts and statements are prepared.
2. Any decision issued by competent authorities to suspend or cancel the fund's
license, or cancel its registration.
CHAPTER FOUR
TEMPORARY EXEMPTION AND ITS RENEWAL FOR ESTABLISHMENTS
AND OMANI COMPANIES
SECTION ONE: CONDITIONS, RULES AND PROCEDURES OF EXEMPTION
Article
81:
Exemption of income realized by an establishment or Omani company is

granted if the following conditions are satisfied:
1. The Omani company shall be established in Oman according to the
aforementioned Commercial Companies Law, or any other Law.
2. The establishment or Omani company shall be registered at the Ministry of
Commerce and Industry or other competent governmental bodies, in
conformity with valid laws and regulations. The establishment shall have its
administrative or business headquarters in Oman.
3. The establishment or the company shall carry on activity in accordance with
laws and valid rules and regulations.
4. The establishment or company shall be licensed to carry on activity and is
registered in records according to laws and valid rules throughout the
specified period of exemption.
5. The establishment or company shall carry on its main activity in any of the
fields prescribed in Article 118 of the Law- except management contracts
and project execution contracts.
6. The establishment or company shall keep regular accounts, certified by a
licensed auditor; on condition, they include independent accounts for the
main activity.
7. The establishment or company shall not be benefiting from the exemption
stipulated in Article 8 of the aforementioned Law of Foreign Capital
Investment or any other Law.
8. The establishment or company shall commit to submit to the Secretariat
General the following:
a) A copy of annual accounts and financial statements immediately upon
approval.
b) A copy of the approval from competent authorities permitting to set up

or carry on the activity, or licenses issued authorizing the
commencement of the activity or the certificate of registration in the
Register as per the latest renewal.
Article
82:
The exemption on the income realized by the establishment or Omani company

from carrying on its main activity exclusively in any of the fields prescribed in
Article 118 of the Law.
Shall only be considered in determining the main activity what is entered in the
company's commercial or industrial register, license or contract of
incorporation or its Articles of Association or else, on condition that it
contributes with no less than 90% of the establishment's or the company's gross
income.
Article
83:
In no circumstance shall an establishment or Omani company be granted more

than one tax exemption in the case of the multiplication of tax-exemption Laws
and systems it is subjected to.
Article
84:
Exemption shall be for a period of five years beginning from the date the
company or establishment starts production or carries on business- as the case
may be.
Article
85:
Exemption shall be granted by taking the following procedures:

1. A legal representative of the establishment or Omani company shall submit
an application for exemption to the Ministry responsible of the sector to
which it belongs; specifying all data pertaining to the establishment or
company as per its Commercial Register and other records and official
documents, bearing- as well- official documents to prove fulfillment of the
conditions for exemption and its proposed date of commencement..
The application shall be submitted according to the attached Income Tax
Form N (10)
2. The application together with enclosures shall be submitted within eight
months (at most) to count from the date assumed for the commencement of
exemption.
3. The Ministry shall examine the application and submit its view, specifying
the following:
a) The
establishment's
or
the
company's
field
of
main
activity.
b) The extent to which the company or establishment satisfies the
conditions of exemption.
c) The date proposed for the commencement of the duration of exemption.
All papers together with the memo shall be submitted to the authorized
Minister for approval provided that referral is furnished along with
documents presented by the establishment or the company within three
months from the date of submission of completed papers.
4. The Secretariat General shall examine the application to ensure fulfillment

of all conditions for exemption.
5. The exemption shall be granted by a decision issued by the Minister.
Article
86:
The establishment or company exempted from tax as per the provision of Article
118 of the Law shall submit the final return of income for any tax year for which
a decision of exemption in whole or in part- has been issued.
The tax due as per the return submitted according to this Article shall not be
payable.
The Secretariat General shall make assessment to determine the amount of
taxable income or loss for the exempted establishments and companies in
implementation of the provisions of the Law.
SECTION TWO: RULES AND PROCEDURES OF RENEWAL OF EXEMPTION

Article
87:
Exemption shall exclusively be limited to establishments or Omani companies

carrying on their main activity in any of the fields specified in Article 118 of the
Law.
Article
88:
Renewal of exemption shall be granted on fulfillment of the following general

rules:
1. The establishment or company shall continue to fulfill the conditions
stipulated in Article 81 of the Regulation during the period specified for
renewal.
2. The net profit achieved by the establishment or Omani company during the
exemption period- after deducting any loss incurred- shall not exceedduring the period of practice of an exempted business activity- 50% of
capital paid at the start of the period, as shall be specified in the accounts
and financial statements accredited by the auditor.
3. The license issued for the establishment or company to carry on the activity
or its registration in the records shall continue to be valid during the period
specified for renewal.
4. The establishment or company shall not benefit from more than one tax
exemption in case of the multiplication of tax exemptions it is subjected to.
Article Without prejudice to the provision of the foregoing Article 88 of this Regulation,
89: the following specific rules shall be met for renewal of the exemption:
1.
2.
The minimum value of investment in fixed assets by an establishment or

Omani company shall be RO 1,500,000.
The premises in which the establishment or Omani company carries on
its main activity- other than the Head Office- shall be outside Muscat
governorate.
3.
The establishment or Omani company shall achieve- during the last two
financial years of the exemption period- a 10 % increase in the average
ratio of Omani to all employees above the ratio fixed for the sector in
which it operates by the Ministry of Manpower, provided that such
percentage shall evenly be distributed to the various administrative
levels such as senior management, professional and engineering and
secondary works.
4.
Products of the establishment or the industrial company registered

according to the aforementioned Law (System) of the Unified Industrial
Organization for the GCC Countries- shall be included in the lists of
important strategic commodities issued by the Ministry of Commerce
and Industry.
5. The services provided by the establishment or the company which carry

on service activities shall be in accordance with the level of
performance which conform with the criteria and rules set forth by the
authorized governmental body.
Article Fulfillment of the specific rules stated in the foregoing Article 89 shall be as
90: follows:
1. Establishments or companies carrying on main activities in any of the
following fields shall fulfill at least three of the specific rules in the case of
establishment, and four of the specific rules in the case of company:
a) Industry.
b) Mining.
c) Export of locally-manufactured or processed products.
d) Production and processing of farms' products- including livestock,
processing or manufacturing of livestock products and agricultural
industries.
e) Fishing, fish processing, cultivation, and fish breeding.
2. Establishments and companies carrying on main activities in any of the
following fields shall fulfill at least two of the specific rules in the case of
establishment, and three of the specific rules in the case of company:
a) Operation of hotels and tourist villages.
b) University education, or colleges, or higher institutes, or private schools,
or kindergartens, or training colleges and institutes.
c) Provision of medical care through establishing private hospitals.
Article
91:
Renewal of exemption for the establishment or the Omani company shall be for a
maximum duration of five years commencing from the date following the date of
expiry of exemption as per Article (84) of the Regulation.
Article
92:
When renewing exemption for the establishments or companies carrying on their

main business activity in industry, seeking the opinion of the Technical
Committee for the Organization and the Development of Industry at the Ministry
of Commerce and Industry shall be taken into account, provided that the
company or establishment achieves the industrial strategy standards as per the
criteria and rules implemented by the Ministry of Commerce and Industry; and on
condition that such establishment or company shall annually submit to the
Secretariat General financial accounts and statements- including separate
accounts for the main activity- all certified by an auditor legally- licensed to
practice the accounting and auditing profession.
Article
93:
The following procedures shall be taken to renew exemption:

1.
Application for the renewal of exemption shall be submitted by the

establishment or the company to the authorized Ministry- within the three
months prior to the exemption's specified expiry date and specifying the
proposed period of renewal- as stipulated in Article 85 of this Regulation.
The application shall be submitted according to the attached Income Tax
Form N (11).
2.
The authorized ministry shall examine the application and express an

opinion thereon specifying the following:
a) Whether the establishment or the company continues to carry on its
main activity in the same field.
b) Whether the license issued for the establishment or company to carry
on its activity or its registration in the Register is valid.
c) Whether and the extent to which the establishment or the company
fulfills the rules set for renewal of exemption.
d) The duration proposed for renewal of the exemption and the date of
its commencement.
Application papers and the memo shall be submitted to the authorized
Minister for approval. All papers together with the documents submitted
by the establishment or the company shall be forwarded to the Minister
within three months from the date of submission of required application.
3. The Secretariat General shall examine the application and enclosures to

ensure compliance with rules for renewal without prejudice to the
regulations stipulated by the Council of Financial Affairs and Energy
Resources.
4. The renewal of exemption shall be granted by a decision of the Minister.
Article
94:
The establishment or the company granted renewal of exemption shall submit the
return of income for every tax year for which a decision of exemption- in whole
or in part- is issued.
The provisions of the second and third paragraphs of Article 86 of this Regulation
shall apply to the return of income referred to in the foregoing paragraph.
SECTION THREE: PROVISIONS OF EXEMPTION ACCORDING TO THE

TYPE OF ACTIVITY
1 PROVISIONS CONCERNING ESTABLISHMENTS AND COMPANIES
CARRYING ON ACTIVITIES IN THE FIELD OF INDUSTRY
Article The following shall be considered when exempting establishments and Omani
95: companies carrying on its main activity in the field of industry:
1. The definition provided for in the aforementioned Law (System) of the
Unified Industrial Organization for the GCC countries shall be taken into
consideration in determining the industrial activity.
2. The industrial enterprise shall not be one of those exempted from being
subjected to the aforementioned Law (System) of the Unified Industrial
Organization for the GCC countries.
Article
96:
The legal representative of the establishment or Omani company carrying on its

main activity in the field of industry shall commit to enclose a copy of the
certificate of registration in the Industrial Register- according to the latest
renewal.
Article
97:
The date of commencement of production of the project shall be determined

according to the certificate of registration in the Industrial Register.
Article
98:
The authorized governmental body at the Ministry of Commerce and Industry

shall notify the following to the Secretariat General:
1. Copies of the licenses issued for the exempted industrial enterprise in the
event of change of its product, merger into another industrial project or its
division into more than one.
2. Copies of the declarations submitted by the industrial enterprise in cases of
its sale- in whole or in part- or its relinquishment or discontinuation, or
dissolution and liquidation thereof or cancellation of industrial registration.
3. Decisions issued stipulating the imposition of final administrative sanctions
against the exempted project.
4. Final administrative decisions stipulating the cancellation of the license of
the exempted industrial enterprise.
2 PROVISIONS CONCERNING ESTABLISHMENTS AND

COMPANIES CARRYING ON MINING ACTIVITIES
Article The following shall be considered in exempting the establishments and the Omani
99: companies carrying on their main activity in mining is subject to the following:
1. The definition provided for in the Mining Law promulgated by the Royal
Decree No. 27/2003 shall be considered in determining the mining activity.
2. The mining concession right shall be awarded according to a special Law.
Article
100:
The authorized governmental body at the Ministry of Commerce and Industry

shall submit to the Secretariat General a copy of the final administrative decisions
stipulating the cancellation of mining licenses issued for the exempted
establishments and Omani companies.

COMPANIES OPERATING IN THE FIELD OF EXPORT OF
LOCALLY MANUFACTURED OR PROCESSED PRODUCTS
Article
101:
In exempting establishments and Omani companies which carry on its main

activity in the field of export of locally manufactured or processed products, the
following shall be considered:
1. Exemption shall be limited to the income realized from the activity of export
of locally manufactured or processed products.
2. Determination of the percentage stipulated in the second paragraph of Article
82 of this Regulation shall be based on the export activity in the cases the
establishment or Omani company carries on the activity of products
manufactured or processing locally.
Article
102:
The Secretariat General shall coordinate- for the purpose of determining the taxexempt income- with the competent authority at the Ministry of Commerce and
Industry for identifying the products manufactured or processed locally.

COMPANIES OPERATING HOTELS AND TOURIST VILLAGES
Article
103:
Article
104:
The following shall be considered in exempting establishments and Omani

companies which carry on its main activity in the field of hotels and tourist
villages:
1. Out of all hotel or tourist facilities stipulated in the Law of Tourism,
promulgated by the Royal Decree No. 33/2002, exemption shall be
restricted to income derived from the operation of hotels and tourist
villages.
2. Exemption shall only be limited to the income derived from the main
activity such as hotel guests, meals, food and beverages, or other hotel
regular visitors or any other activity necessary and indispensable to this
activity.
3. Exemption shall not include hotels or tourist villages operated under
management contracts concluded in accordance with the license issued by
the ministry of Tourism for this purpose.
4.
The Secretariat General shall- - for the purpose of determining the income
exempted due to involvement in carrying on this type of hotel facilitiescoordinate with authorized governmental bodies- to determine the rules and
regulations of operating tourist villages' activity.
Article
105:
The competent authorized at the Ministry of Tourism shall notify the Secretariat
General of the cases where the license issued for an exempted establishment or
Omani company is modified, abandoned, transferred, suspended, or cancelled.

COMPANIES WHICH CARRY ON ACTIVITY IN THE FIELD OF
FARMING AND PROCESSING OF FARM PRODUCTS
INCLUDING LIVESTOCK AND THE PROCESSING OR
MANUFACTURING OF LIVESTOCK PRODUCTS AND THE
AGRICULTURAL INDUSTRIES
Article
106:
When exempting establishments or Omani companies that carry on their main

activity in farming and processing of farm products and agricultural industries,
the following shall be considered:
1. The establishment or Omani company shall have an agricultural
proprietorship card.
2. Exemption shall include the income realized from livestock production in
the farm and the processing of their products.
3. The agricultural industries' activity shall be similar to the industrial
activity- for the purpose of exemption- on condition the activity is
considered an industrial project in implementing the provisions of the
aforementioned Law (System) of the Unified Industrial Organization of the
GCC countries.
Article
107:
The following shall be considered in granting exemption to establishments and

Omani companies which carry on their main activity in the field of animal
production farms and the manufacturing of livestock products:
1. In determining animal production farms and animal products- the
definitions contained in the Code of Pastures and Livestock Management,
promulgated by the Royal Decree No. 8/2003 shall be considered.
2. The establishment or Omani company shall be the proprietor of livestock, a
holder of the livestock proprietorship card and shall be registered in the
records prepared for this purpose.
3. The establishment or Omani company shall be a holder of the commercial
livestock production farms' license or the Livestock Products'
Manufacturing license.
4. Livestock manufacturing activity shall be similar to an industrial activity
provided that such activity shall be considered as an industrial project in
implementing the provisions of the aforementioned Law (System) of the
Unified Industrial Organization of the GCC countries.
Article
108:
The Secretariat General shall- for the purpose of identifying the concepts and
principles pertaining to the processing of farms' products, the processing or
manufacturing of livestock products or agricultural industries- coordinate with the
competent authorities for the purpose of determining the income exempted from
tax.
Article
109:
The competent authority at the Ministry of Agriculture and Fisheries shall notify
the Secretariat General of the following:
1. Cases of change in or relinquish of agricultural proprietorship card, of
change in livestock proprietorship card, or of amendment to the livestock
products' license or the commercial livestock production farms' license.
2. Cases of withdrawal of licenses on a temporary or a final basis.

COMPANIES WHICH CARRY ON THEIR ACTIVITY IN THE
FIELD OF FISHING AND FISH PROCESSING, FARMING AND
BREEDING
Article
110:

companies which carry on their main activity in the field of fishing and fish
processing:
1. The establishment or Omani company shall carry on activity through
licensed fishing vessels.
2. Omani fishing vessels utilized in carrying on the activity shall be registered
at the Ministry of Transport and Telecommunications.
3. The establishment or Omani company shall carry on fish processing activity
after obtaining the legallyrequired license, where the processing activity
shall be similar to an industrial activity in implementation of the provisions
of the aforementioned Law (System) of the Unified Industrial Organization
of the GCC countries.
Article
111:
The following shall be considered in exempting establishments or Omani

companies carrying on their activity mainly in the field of fish farming and
breeding:
1. Determining fish farming and breeding activity shall be based on the
definition of Commercial Fish Farming set forth in Fish Farming and
Farmed Fish Quality Control Regulation, promulgated by the Ministerial
Decision No. 36/2004.
2. The establishment or Omani company shall obtain the required license to
carry on activity from the Ministry of Agriculture and Fisheries in
implementing the aforementioned Regulation of Fish Farming and Farmed
Fish Quality Control.
Article
112:
Exemption shall exclusively be limited to income generated from fishing, fish

farming, or breeding not any other living aquatic resources.
Article
113:
The competent authority at the Ministry of Agriculture and Fisheries or at the

Ministry of Transport and Telecommunications- as the case may be- shall notify
the following data to the Secretariat General:
1. Cases of modification or cancellation of the registration of fishing vessels
owned by the exempted establishments or Omani companies.
2. Cases of withdrawal, or cancellation or suspension of the license issued to
fishing vessels owned by the exempted establishments or Omani
companies.
3. Cases whereby approval is obtained for the lease, relinquish, or disposal of
fishing vessels owned by the exempted establishments or Omani
companies.
4. Cases of withdrawal, cancellation or suspension of the license issued for
fish processing, or commercial aquaculture or fish breeding farms.

FIELD OF UNIVERSITY EDUCATION, COLLEGES OR HIGHER
INSTITUTES
Article
114:

companies which carry on their main activity in the field of University Education,
Colleges or Higher Institutes:
1. The private university, private university college or private higher institute
or private college shall be established according to the rules applicable in
the Sultanate.
2. Companies that have established a private university or a private university
college or a private higher institute or a private college shall not be subject
to the aforementioned Foreign Capital Investment Law.
3. The private university or the private university college or the private higher
institute or the private college shall not execute any training sessions or
programs.
Article
115:
The competent authority at the Ministry of Higher Education shall notify the
Secretariat General with the following:
1. Cases of declining the approval issued for the establishment of a private
college, or a private higher institute or a private college.
2. Final administrative decisions bearing sanctions on the exempted private
university or ordering closure of colleges or the higher institutes or
suspension of study thereof.

FIELD OF PRIVATE SCHOOLS AND NURSERIES
Article
116:

companies which carry on their main activity in the field of private schools or
nurseries:
1. The private school or the nursery owned by the establishment or Omani

company shall be established according to the rules applicable in the
Sultanate.
2. The private school or the nursery shall not execute any training programs
or sessions.
3. The company owning the private school or the nursery shall not be subject
to the aforementioned Foreign Capital Investment Law.
Article The authorized body at the Ministry of Education shall notify the Secretariat
117: General with the following:
1. Cases where an approval to open branches has been given to a private
school or a nursery.
2. Cases of approval of relinquish of the license issued to establish or to close
a private school or a nursery.
3. Final administrative decisions prescribing the cancellation of a license
issued to establish a private school or a nursery.

COMPANIES CARRYING ON ACTIVITY IN THE FIELD OF
TRAINING COLLEGES AND INSTITUTES
Article
118:

companies carrying on their main activity in the field of training colleges and
institutes:
1. The establishment or Omani company shall be licensed to establish a
private vocational institute according to the rules in force in the Sultanate.
2. The institute shall engage in vocational training activities excluding:
academic education- either general or higher- or higher technical education
or training services.
3. The institute shall be registered at, licensed and supervised by the Ministry
of Manpower.
4. The company licensed to establish the vocational institute shall not be
subject to the aforementioned Law of Foreign Capital Investment.
Article
119:
Private vocational training centers established by the employer for his employees
in his facility shall not be considered as training institutes and shall not be subject
to the provisions contained in this Chapter.
Article
120:
The competent authority at the Ministry of Manpower shall notify the Secretariat
General the following:
1. Cases whereby approval is given to the private vocational institute to open
new branches or add new specialties.
2. Final administrative decisions issued in respect of the evaluation and
classification of the institute.
3. Cases of closure or suspension of activity by the owner or death of the
owner.
4. Cases whereby the institute premises are used for activities other than the
licensed training ones.
5. Cases of cancellation of the license issued for the institute or its suspension.
6. Cases of violation by the institute of rules, regulations and contracts

concluded to comply with the System of Government Support Programs
(National Programs).
7. Cases whereby a decision is issued by the Ministry of Manpower to stop the
institute's programs or training courses.
8. Final administrative decisions prescribing either the cancellation of approval
for programs and training courses or the suspension of the license for a
period not exceeding one year.
COMPANIES CARRYING ON ACTIVITY IN THE FIELD OF
MEDICAL CARE THROUGH ESTABLISHING PRIVATE
HOSPITALS
Article
121:

companies carrying on their main activity in the field of medical care through
establishing private hospitals:
1. Determination of a hospital shall be based on the definition contained in the
Executive Regulation for private hospitals, issued by the Ministerial
Decision No 25/2009, shall be adopted in determining a hospital.
2. The private hospital shall be owned by the managing establishment or
Omani company.
3. Carrying on activity by the private hospital shall be under a license issued
in accordance with the rules applicable in the Sultanate laws.
4. License issued for the hospital to carry on activity shall be valid throughout
the period determined for exemption.
Article
122:
The competent authority at the Ministry of Health shall notify the Secretariat
General with the following:
1. Final administrative decisions amending or canceling licenses issued to the
private hospitals.
2. Judicial decisions ordering closure of the hospital.
CHAPTER FIVE
GENERAL RULES
Article
123:
The Secretariat General shall notify the establishment, company, person or

investment fund with the decision granting the exemption or renewal of
exemption in the case of temporary exemption or the decision stating the nonfulfillment of the rules for exemption or renewal thereof.
In the case of temporary exemption, such notification shall state the date of
commencement of exemption and its duration.
Article
124:
To implement the provisions of this Chapter, the Secretariat General shall record
all decisions of exemptions or renewals of exemptions in the Register especially
prepared for this purpose.
Article
125:
The Secretariat General may take necessary measures to temporarily suspend

exemption in case of non-submission of the required official documents or
accounts and financial statements.
Also, the Secretariat General may also take necessary measures to withdraw the
decision granting exemption or renewal of exemption if involved an incorrect
reason.
Article
126:
The Secretariat General shall take necessary measures to cancel the exemption or
the renewal as from the date on which substantial evidence is found that the
establishment, company, person or investment fund no longer carries on the
activity in the exclusive fields specified in the Law, or fulfills the rules for
exemption or renewal thereof.
Article
127:
The temporary suspension, withdrawal or cancellation of exemption and

withdrawal or cancellation of renewal of exemption shall all be made by a
decision of the Minister.
The establishment, company, person or investment fund shall- in all cases- be
notified of the decision issued and record the same in the Register- specially
prepared for this purpose.
Article
128:
The Secretariat General shall take necessary measures in respect of temporary

exemption granted to establishments and Omani companies upon notification in
light of the study it conducts for each establishment or company- in coordination
with the competent ministry or authority.
Article
129:
The Secretariat General shall- in case of cancellation of exemption or renewal

thereof or withdrawal or suspension of exemption for one year- immediately take
the procedures under the Law to make tax assessment for every year for which
exemption had unlawfully been granted to the establishment, company, person or
the investment fund for each of the year for which a decision had been taken to
withdraw, cancel or suspend for one year the exemption or the renewal thereof.
The establishment, company, person or the investment fund shall- upon receipt of
the notification - submit the return of income for each of the aforementioned
years and pay the tax due as specified by the laws and regulations in effect.
PART SEVEN
TAX ASSESSMENT
CHAPTER ONE
RETURN OF INCOME
Article
130:
The provisional return shall be submitted according to the Income Tax Form No
12 attached to this Regulation.
Article
131:
The final return shall be submitted as follows:

1. As per the Income Tax Form No. 13 attached to this Regulation by the
establishment which has not been exempted from furnishing accounts.
Omani company which has not been exempted from furnishing accounts.
permanent establishment.
4. As per the Income Tax Form No. 16 attached to this Regulation by a
foreign person providing services in Oman.
5. As per the Income Tax Form No. 17 attached to this Regulation by
establishments and Omani companies exempted from furnishing accounts.
Article
132:
Submission of the return by a foreign person providing consulting or other

services in Oman shall be as follows:
1. The provisional return shall be submitted within three months starting from
the end of a twelve-month period during which the foreign person has
rendered services in Oman for a continuous period or for separate periods
of not less than ninety days in aggregate, except where the period specified
for the provision of services in Oman is less than six months, the
provisional return shall be submitted on the date specified for the
completion of services in Oman.
2. The final return shall be submitted within six months starting from the
expiry date of a twelve-month period during which the person has rendered
services in Oman for a continuous period or for separate periods of not less
than ninety days in the aggregate, except where the period determined for
the provision of services in Oman is less than nine months, the final return
shall be submitted on the date specified for the completion of services in
Oman.
Article
133:
Payment of withholding tax to the Secretariat General shall be accompanied with

the statement mentioned in the last paragraph of Article (53) of the Law.
The aforementioned statement shall be prepared according to the Income Tax
Form No. 18 attached to this Regulation.
SECTION TWO: RULES FOR EXEMPTION FROM SUBMITTING THE

RETURN
Article
134:
The Omani establishment or company satisfying the following conditions shall

be exempted from submitting the return for any accounting period related to a tax
year:
1. The capital at the end of the accounting period as recorded in the
commercial Register shall not exceed- (RO 20,000) twenty thousand Rials
Omani.
2. The gross income realized by the establishment or the Omani company
during the aforementioned accounting period shall not exceed- - (RO
100,000) one hundred thousand Rials Omani.
3. .The average number of employees during that accounting period shall not
exceed (8) persons; provided that- in determining the average number, all
workers shall be considered - whether occasionally or temporarily
recruited- whatsoever nature, kind, location or duration of work assigned to
them and the method adopted in determining their wages.
These conditions shall be satisfied during that period and during the two
accounting periods ended upon the expiry of the two tax years prior to that
period.
Article
135:
The exemption stipulated in the aforementioned Article (134) shall not apply in
the cases where the establishment or Omani company fails to submit the
notification stipulated in Article (17) of this Regulation
Article
136:
The exemption from submitting tax returns shall only take effect by a decision of
approval from the Secretary General or his authorized delegate upon a request
by the establishment or Omani company- after confirming fulfillment of all the
conditions specified in Article (134) of this Regulation.
The decision shall determine the accounting period or the tax year for which the
exemption shall take effect, its duration, any tax obligations or requirements
prescribed by the Secretariat General during that period or after the expiry of that
period.
The Secretariat General shall withdraw or cancel the decision if the same
involved error and shall notify the establishment or the company thereof.
Article
137:
The establishment or Omani company for whom the decision of exemption from
submitting the return is issued shall submit an application to the Secretariat
General- at least three months prior to the expiry of the exemption period
prescribed- requesting a decision for exemption for the subsequent tax year.
Article
138:
The establishment or Omani company for which the decision of exemption is

granted shall undertake to submit the return of income in the following cases:
1. Occurrence of any event resulting in one or more of the conditions for
exemption not being satisfied, the return shall be submitted within one
month of its occurrence.
2. Abstention from submitting-within the prescribed date- any details,
information, records or accounts requested by the Secretariat General for
the purpose of implementing the exemption.
3. Withdrawal or cancellation of the decision of exemption issued.
SECTION THREE: RULES FOR EXEMPTION FROM SUBMITTING

ACCOUNTS WITH THE FINAL RETURN
Article
139:
The Secretariat General may exempt any establishment or Omani companywhich has not been exempted from submitting a return of income- from
submitting the accounts prepared for any accounting period related to a tax year
provided that the following conditions are satisfied:
1. The capital of the establishment or Omani company as recorded in the
Commercial Register at the end of the accounting period shall not exceed
RO 50,000.
2. The gross income realized by the establishment or Omani company during
that accounting period shall not exceed RO 300,000.
3. The average number of employees during that accounting period shall not be
more than (10) persons; provided that, in calculating the average, all
employees shall be considered whatever be the nature, type, location or
duration of work assigned to them, including occasional or temporary
recruitment, and whatever method adopted for determining the wages.
Article
140:
The exemption stipulated in the foregoing Article (139) shall not be implemented
in case the establishment or Omani company fails to submit the notification
stipulated in Article (17) of this Regulation.
Article
141:
The exemption from submitting accounts shall only take effect by a decision of
approval from the Secretary General or his authorized delegate upon a request
by the establishment or Omani company- after confirming fulfillment of all the
conditions specified in Article (139) of this Regulation.
The decision shall determine the accounting period or the tax year for which the
exemption shall take effect, its duration or requirements prescribed by the
Secretariat General during that period or after the expiry of that period.
The Secretariat General shall withdraw or cancel the decision if the same was
based on an incorrect reason and shall notify the establishment or the company
thereof.
Article
142:

issued shall be obliged to submit an application to the Secretariat General- three
months at least prior to the expiry date of the exemption- requesting a decision
for exemption for the subsequent tax year.
Article
143:

issued shall undertake to submit the accounts in the following cases:
1. Occurrence of any event resulting in one or more of the conditions not
being satisfied; the accounts shall be submitted within one month of one
month of its occurrence.
2. Abstention from submitting-within the prescribed date- any details,
information, records or accounts requested by the Secretariat General for
the purpose of implementing the exemption.
3. Withdrawal or cancellation of the decision of exemption issued.
CHAPTER TWO
PROCEDURES OF ASSESSMENT
Article
144:
The Secretariat General has the right to examine documents or details, or

accounts or accounting records, or lists of assets or liabilities for the purpose of
making assessment.
Such examination may be conducted at the taxpayer's premises during normal
working hours after notifying the taxpayer by specifying the date and the
duration of the examination at least ten days prior to the date specified for the
examination.
Documents, or data, or accounts, or records, or statements relating to tax
obligations of a tax year if it relates to more than ten years prior to the tax year
in which the notification is submitted, may not be examined.
Article
145:
The Secretariat General shall notify the assessment to the taxpayer within a
maximum of two weeks from the date of making the assessment.
Article
146:
The Secretariat General shall- in the case of rectification, revision of the

assessment or issue of an additional assessment- forward a notice in writing to
the taxpayer including the following information:
1. The tax year for which the original assessment is made and the date of
making the assessment.
2. The date of rectification or revision of the original assessment, or of making
additional assessment.
3. The tax year/ tax years for which rectification or revision of the original
assessment or additional assessment is made.
4. The elements of rectification or revision for the original assessment, or the
additional assessment.
5. Determination of the amount of taxable income or loss consequent to
rectifying or revising the original assessment or making an additional
assessment.
6. The amount of tax payable.
7. The due date of tax payment.
8. Any other details, as may be decided by the Secretariat General.
Article
147:
The Secretariat General shall- in the case of rectification, revision of the original
assessment or making an additional assessment- notify to the taxpayer the
assessment, consequent to its rectification or revision or making of an additional
assessment, within a maximum of two weeks from the date of rectification or
revision or of making the additional assessment.
PART EIGHT
PAYMENT AND COLLECTION OF DUE TAX
CHAPTER ONE
GENERAL RULES
Article
148:
1. Tax due as per the return of income, both provisional and final is payable on
the date specified for the submission of each.
2. Tax due as per the assessment is payable on the date specified in the notice of
assessment which date shall not exceed one month from the date of making
the assessment.
The provision of the foregoing paragraph shall apply in the case of additional
assessment, or assessment made in executing a judicial judgment or a Court
judgment issued in the adjudication of a tax dispute.
Article
149:
Payment of tax or other amounts due as per the Law shall be made by one of the
following methods:
1. By cash against a receipt issued.
2. By bank cheques drawn to the account of the Secretariat General of
Taxation at the Ministry of Finance.
3. By depositing due amount to the current account assigned by the Secretariat
General for this purpose; provided that certified copy of the deposit receipt
issued by the bank to which the amount is deposited is submitted.
4. By issuing a written order for the transfer of the amount from the bank
account of the tax debtor or taxpayer to the account of the Secretariat
General and notifying the Secretariat General thereof. Payment shall not be
considered paid unless the amount is credited to the Secretariat General's
account.
Article
150:
The Secretariat General shall be obliged- in the event of death, dissolution,

liquidation or declaration of bankruptcy of the tax debtor or the person liable to
pay the tax- to follow the procedures stipulated in the Executive Regulation of
the Financial Law.
CHAPTER TWO
TAX PAYMENT IN INSTALLMENTS
Article
151:
The tax debtor may pay due tax in installments by submitting an application for
the same, provided that the following conditions are satisfied:
1. The tax debtor proves inability to pay its tax due tax all in one single
payment.
2. Installments shall be paid monthly, but- in cases of extreme necessity- they
may be paid on a quarterly basis.
3. The number of years of installments shall not exceed the number of years
for which payable tax is due. However, in cases of extreme necessity, the
years of installments may exceed that number.
4. The tax debtor shall submit- within 15 days of being notified of approval of
its/his installment application- a cheque for the first installment or the part
specified by the Secretariat General accompanied with guarantees and
insurances for all amounts due from it. This guarantee shall be valid
throughout the duration of the installments until payment is fully set off.
The Secretary General may- when deemed necessary- exempt the tax defaulter
from submitting guarantees or insurances.
Article
152:
A decision of approval of payment by installments shall be issued by taking the

following procedures:
1. The authorized Department at the Secretariat General shall examine the
application for payment by installments in terms of fulfillment of the
conditions prescribed in the Executive Regulation. The Secretary General
shall issue a decision of approval for payment by installments specifying the
guarantees and insurances to be provided by the tax debtors unless he is
exempt from submission the same. The decision shall be accompanied by a
schedule for payment.
2. The tax debtor shall be notified with a certified copy of the decision of
approval for payment by installments.
3. The authorized Department at the Secretariat General shall follow up the
timely payment of installments by the tax debtor. In the event of his failure
to make payments within the dates specified, a warning shall be served
requesting him to make payment within a maximum period of ten days. In
the event the tax debtor fails to pay within this period, the authorized
Department shall issue a decision from the Secretary General to expedite the
payment of amounts due from the debtor, and ordering him to pay them
immediately, failing which, the procedures stipulated for administrative
enforcement shall then be taken against him.
4. The Secretary General shall issue a decision at the request of the
authorized Department- cancelling the decision of payment by installments
if interest of the public treasury is found to be at risk of loss. In such case,
the tax debtor shall be notified of the decision of cancellation of payment by
installments.
CHAPTER THREE
RULES AND REGULATIONS FOR EXEMPTION OF ADDITIONAL TAX

Article
153:
The Secretary General may grant exemption from payment of additional tax in
the following cases:
1. Death of a tax debtor -where he was the owner of an establishment- without
leaving any property behind, or with leaving properties not sufficient to
cover the debts.
2. Dissolution, liquidation or declared bankruptcy of the tax debtor, resulting
in amounts from the liquidation or bankruptcy not sufficient to meet the tax
due and payable.
3. Lack of properties on the part of the tax defaulter to allow enforcement.
4. Cessation of tax defaulter's activity or work and lack of properties to allow
enforcement.
5. Cases whereby evidence is found that the tax defaulter's delay in payment of
the original tax is attributed to unforeseen reasons or conditions.
Article
154:
Exemption from additional tax shall be granted by taking the following

procedures:
1. The tax debtor shall submit to the Secretary General an application for
exemption accompanied with official documents to prove occurrence of
any of the cases stipulated in the foregoing Article (153) of this Regulation.
2. The authorized Department at the Secretariat General shall examine the
referred to exemption application.
3. A decision granting full or partial exemption from additional tax shall be
issued by the Secretary General.
4. The Secretary General shall withdraw the decision of exemption if it is
proved that such decision was based on an incorrect reason, whereupon,
necessary measures shall immediately be taken to collect the additional tax
due.

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Ministerial Decision No.

Issuing the Executive Regulation of the Income Tax Law

It has been decided as follows:

The forms attached to this Regulation shall be considered as an integral part

Issued on: 22.02.1433 AH

Published in the Official Gazette Edition 958 dated 28 January 2012

In implementation of the provisions of this Executive Regulation, the words

Provisions of tax treatment applicable to the GCC nationals - natural or legal

In considering an agent carrying on activity on behalf of a foreign person as its

Notification to the Secretariat General - with respect to the permanent licenses

Whenever temporary licenses are issued, a notification shall be served thereupon

The notification shall - in all cases prescribed in this Chapter- be submitted in

The notification of the taxpayer's information as prescribed in Article (11) of the

Notification of any changes of the taxpayer's information shall be submitted

In order to deduct the amounts of contribution paid to pension funds set up in

SECTION TWO: CONDITIONS FOR DEDUCTING CONTRIBUTIONS

Deduction of amounts of contribution paid to pension funds set up outside Oman

Deduction of amounts that the taxpayer- in his capacity as an employer, is obliged

Debt shall not be considered as bad in the following two cases:

In implementing the provisions of this Chapter, an authorized agent means any

When determining the taxable income of any foreign insurance company

RULES FOR DETERMINING THE INTEREST ON LOANS THAT MAY BE

SECTION TWO: INTEREST ON LOANS THAT MAY BE DEDUCTED IN

The following are the conditions to be fulfilled in deducting interest on loans as

SECTION THREE: INTEREST ON LOANS THAT MAY BE DEDUCTED IN

The value of loans due shall be computed- in implementing the provisions of

SECTION FOUR: INTEREST ON LOANS THAT MAY BE DEDUCTED WHEN

There shall not be deducted the amounts allocated by the permanent

SECTION TWO: SALARIES PAYABLE TO OWNERS OR PARTNERS OF

Commercial Register shall be taken into consideration.

In implementation of the provisions of this Section, there shall be treated as

Where a partner runs more than one establishment or company, or runs a

SECTION THREE: AMOUNTS DUE IN RETURN FOR UTILIZATION BY AN

In computing the taxable income of an establishment, deduction of the amounts

Provisions of this Chapter shall apply to any permanent establishment, except

Gross income means- in implementation of the provisions of this Chapter

When computing the taxable income of a permanent establishment, the Head

SECTION TWO: EXPENSES INCURRED BY THE HEAD OFFICE SOLELY FOR

SECTION THREE: EXPENSES INCURRED BY THE HEAD OFFICE FOR THE

1. 5% of the of the permanent establishment's gross income in the case of

In no circumstance- in determining the taxable income of a permanent for any tax

The following shall be considered in implementing the provisions of this section:

It shall be considered an act of disposal, in implementing the provisions of

Exemption of establishments and Omani companies carrying on shipping activity

Exemption shall be limited to the income exclusively derived by the

The establishment or Omani company shall submit to the Secretariat General

The Secretariat General shall examine the application to determine compliance

The person shall submit an application bearing official documents proving

The foreign person shall undertake to notify the

Secretariat General the

1. Official documents proving fulfillment of the condition stipulated in Clause

Exemption to investment funds set up in Oman shall be granted upon meeting

Exemption to investment funds set up outside Oman shall be granted upon

Compliance with the provisions of last paragraph of Article (74) of this

Exemption of income realized by an establishment or Omani company is