Oman Tax Guide for Expats 2026
Royal Decree 56/2025 introduced a personal income tax (PIT) framework in Oman:
• Threshold: Annual income above OMR 42,000
• Rate: 5%
• Implementation: Scheduled to begin in 2028
• 2026 status: PIT is not yet in force — your salary remains gross in 2026 and 2027.
Monitor updates from the Oman Tax Authority (taxoman.gov.om).
Tax Summary — Oman 2026
| Tax Type | Rate | 2026 Status |
|---|---|---|
| Personal Income Tax (PIT) | 0% now | Not in force — announced for 2028 (Royal Decree 56/2025) |
| Salary Tax / PAYE | 0% | No — full salary is paid gross |
| Capital Gains Tax | 0% | No — not applicable |
| Inheritance / Wealth Tax | 0% | No — not applicable |
| VAT (Value Added Tax) | 5% | Yes — on purchases |
| Corporate Income Tax | 15% | If you own a business in Oman |
| SPF Contribution (Omanis only) | ~7% | No — Omanis only |
Personal Income Tax in Oman — 2026 Position
As of 2026, Oman does not impose personal income tax on wages, salaries, or employment income. No personal income tax deduction currently applies to employment income in Oman. Other contractual or lawful deductions (such as employer-agreed advances or court orders) may still apply — but none related to income tax.
Looking ahead to 2028: Royal Decree 56/2025 introduced a personal income tax law with a 5% rate on annual income above OMR 42,000 (approximately OMR 3,500/month). Implementation is scheduled from 2028. Workers earning below the threshold will remain unaffected even after implementation. For the latest official information, refer to the Oman Tax Authority website.
What This Means for Expats
If PIT is implemented as announced in 2028, only earners above the OMR 42,000/year threshold would be affected. Monitor official announcements from the Oman Tax Authority (taxoman.gov.om) for implementation details, exemptions, and residency rules that may apply.
VAT — 5% Since April 2021
Oman introduced Value Added Tax (VAT) at 5% on 16 April 2021 (Royal Decree 121/2020). This is among the lowest VAT rates in the world. VAT applies to most goods and services consumed in Oman.
| Category | VAT Rate | Examples |
|---|---|---|
| Standard rate | 5% | Restaurants, electronics, clothing, fuel |
| Zero-rated | 0% | Qualifying goods & services per OTA rules — verify at taxoman.gov.om |
| Exempt | No VAT | Bare land, local passenger transport, certain financial services |
Social Protection Fund (SPF) — Omanis Only
The Social Protection Fund (SPF) contribution is not a tax — it is a pension and end-of-service savings scheme for Omani nationals. Expatriates do not contribute to SPF and do not receive SPF benefits.
- Omani employee contribution: ~7% of basic salary
- Employer contribution (for Omani staff): ~10.5% + additional components
- Expatriates: No SPF deduction — no benefit either
Expatriates receive end-of-service gratuity directly from their employer under Article 61 of the Labour Law instead.
Corporate Tax in Oman
If you own or operate a business in Oman, corporate income tax applies:
- Standard rate: 15% on taxable profit
- Small business rate: 3% for qualifying businesses with gross annual income ≤ OMR 150,000 meeting specified conditions — verify current criteria with the Oman Tax Authority
- Withholding tax: 10% on royalties, management fees, and certain payments to non-residents
- Dividends: Withholding tax can apply at 10% to certain payments to non-residents, subject to applicable exemptions and tax treaties — verify with OTA
Frequently Asked Questions
Do I need to pay tax in my home country on income earned in Oman?
This depends on your home country's tax laws. Many countries (India, Philippines, etc.) exempt foreign-earned income or provide tax credits. Some countries (like the US) tax citizens on worldwide income regardless of where they live. Check with a tax advisor in your home country for your specific situation.
Is there a double taxation agreement (DTA) between Oman and India/Pakistan/Philippines?
Oman has double taxation avoidance agreements (DTAA) with several countries including India, the UK, France, and others. These agreements prevent you from being taxed on the same income in both countries. Check your country's DTAA with Oman for specific provisions.
Will Oman introduce income tax? When?
Yes — Oman has officially announced personal income tax via Royal Decree 56/2025. The key details: 5% rate on annual income above OMR 42,000, with implementation scheduled from 2028. In 2026 and 2027, no income tax is in force. Workers earning below OMR 42,000/year will not be affected even after 2028 implementation. Verify the latest status with the Oman Tax Authority (taxoman.gov.om).
Tax information sourced from: Oman Tax Authority (taxoman.gov.om) | Royal Decree 121/2020 (VAT) | Royal Decree 56/2025 (PIT announcement) | Ministry of Finance, Sultanate of Oman.
Last updated: September 2026. Tax laws change — always verify with the Oman Tax Authority or a licensed tax advisor before making financial decisions.