Double Taxation Agreement Oman

The network of Omans effective double taxation conventions currently includes tax treaties with Algeria, Belarus, Brunei, Canada, China (popular representation), Croatia, France, Hungary, India, Iran, Italy, Japan, Korea (Rep.), Lebanon, Mauritius, Moldova, Morocco, Netherlands, Pakistan, Portugal, Seychelles, Singapore, South Africa, Sri Lanka, Sudan, Switzerland, Syria, Spain, Thailand, Tunisia, Turkey, United Kingdom, Uzbekistan, Vietnam and Yemen. The maximum WHT levels provided by Oman`s DTTs are shown in the table below. There are also agreements with different countries that are not yet in force. Oman currently has 35 effective (comprehensive and limited) double taxation agreements with other countries/territories to prevent double taxation and to enable cooperation between Oman and overseas tax authorities to enforce their respective tax laws. Foreign companies that, for tax reasons, do not have AD in Oman and who receive revenues from Oman depending on the nature of the following sources are subject to withholding tax (WHT) in 10% of the gross income of these sources: PE has been defined, among other things, to include foreign companies providing services in Oman, where the presence of the company`s employees in Oman (or others under the control of the company) exceeds 90 days over a 12-month period. The existence of a representative of a foreign company in respect of a business or contract in Oman may trigger the company`s taxable presence in Oman for corporate tax purposes. With respect to dividends, the amended RAs stated that the withholding tax applied only to “dividends distributed by limited companies and investment funds with respect to investment instruments” and not to LCCs. On May 15, 2019, following a royal directive, Oman (CMA) announced that His Majesty Sultan Qaboos bin Said had authorized WHT`s suspension on dividends and interest. This suspension, as indicated in the announcement, will begin on May 6, 2019, will apply for a period of three years and may, if necessary, be extended for additional periods. The suspension of WHT`s interest rate will potentially benefit all payers and benefit public companies with respect to dividends, as other forms of business are not subject to WHT dividends.

The aforementioned royal directive is forward-looking in nature. As a result, die WHT would continue to apply to dividends and interest by May 6, 2019, based on applicable law. At present, there are no exchange controls in place in Oman. On 13 March 2019, a royal decree was adopted to approve the selective/excise tax law in Oman, which was transposed and came into force on 15 June 2019. Executive regulations for the excise tax law are still pending and will be published within 6 months of June 15, 2019. In accordance with the ministerial decision on the determination of the nature, value and tax rate of excised goods, excise tax is levied at 50% on soft drinks and 100% on alcohol, energy drinks, pork products and tobacco products.

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