Personal Income Tax Introduced in Oman
On the date 22nd June 2025, the government of Oman announced something that is a new law about personal income tax. The new law of Oman was introduced through Royal Decree No. 56/2025. The new tax law is even mentioned in Article 1 of the Royal Decree, but for now its complete detail or full text was not shared with the public.
On Sunday, June 30, 2025, the complete personal income tax law is planned to be released to the Official Gazette so that the people can know further details. The process of application is scheduled to begin on January 1, 2028.
According to an update that has been made recently from the Tax Authority of Oman, the new personal income tax law is expected to apply ono the income of individuals who live in Oman for tax purposes, based on the following points:
- No tax will be charged on yearly earnings of OMR 42,000 or less.
- A 5% tax will apply to yearly income that goes over OMR 42,000.
When the entire law will be made public only then we will be able to understand precisely that which forms of income will be subject to taxes and what expenses are deductible. However, it is expected that citizens will be allowed to deduct costs like education, healthcare, charitable donations, and zakat, along with some other expenses.
The Royal Decree cancels Article 18bis (1) of the Omani Income Tax Law, along with any other rules that go against the new personal income tax law, starting from the date the new law begins. Article 18bis (1) says that a person is considered a tax resident in Oman if they stay in the country for at least 183 days in a tax year, whether those days are in a row or spread out.
The main purpose of the new personal income tax law is to support the financial stability of Oman and match the goals of Oman Vision 2040. The money collected from this tax will help to pay for social support programs as well as it will also be used to grow and develop different parts of the economy.
Oman is the first country in the Gulf region who introduced personal income tax, which is a major step towards the growth of Oman. Right now, it is not clear that any other country in the Gulf will do the same or not. Currently, the other Gulf countries have not shown any plans to bring in personal income tax. However, tax rules in the region are changing, and other countries will likely pay close attention to how this new tax works out in Oman.
