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Income Tax Law Oman

Oman: Royal Decree 118/2020 amending provisions of the Income Tax Law

On 26th November 2019, Oman signed several international agreements regarding tax, the agenda behind these agreements was to facilitate ease of information exchange in the realm of tax. Thereafter, significant changes were brought about in the Income Tax Law (ITL). The amendments to the law include; facilitating the exchange of information between tax jurisdictions through Automatic Exchange of Information (AEOI), the requirements of filing tax returns, the introduction of a tax residency section, among other things.

As a general rule, tax information is prohibited from being disclosed to any person who is not authorized to receive such information. However, as per the amendment of Article 29 of the ITL disclosure of financial information is allowed in the following cases:

  1. Judicial decisions or decisions issued by an official body authorized to do so;
  2. A decision issued by the Income Tax Committee and the implementation thereof; and
  3. Consent of the authorized person regarding disclosure

The AEOI authorizes the Tax Authority to obtain financial information or any such data and documents for the implementation of bilateral and multilateral treaties concerning tax. Further, the AEOI also authorizes tax authorities to obtain financial information related to any individual from any licensed bank in the country, moreover, the tax authority may also search the residence of such a person. In obtaining such information the licensed bank is not required to inform the concerned individual of such a search being conducted, failure to comply with the search request by the Authority can attract administrative penalties.

As mentioned above, the amendment aims to define tax residency by defining concerned persons under the Law. As per the amendment, a tax resident is any person who is;

  1. A natural person residing within the country exceeding 183 days (continuously or intermittently) within the tax year
  2. Legal persons who may either be an entity established within the country or the headquarters or place of management thereof are present within the territory of the country.

Further, a Tax Grievances Committee has been established to receive appeals against any decisions that have been passed by the Tax Authority. Such appeals are required to be submitted in writing accompanied by the reasons for writing such a complaint. These measures have been taken in furtherance of the interest of governments and tax jurisdictions across the international tax sphere to curb tax fraud crimes and evasions.