Personal Income Tax Law to take effect in Oman

Muscat: The Personal Income Tax Law issued by Royal Decree No. 56/2025 consists of 76 articles distributed across 16 chapters. The law will impose a 5% tax on the taxable income of natural persons whose gross annual income exceeds OMR42,000, derived from specific income types as defined by the law. The law will come into effect at the beginning of 2028.

The Tax Authority said that the Personal Income Tax Law complements the tax system in line with Oman’s economic and social conditions and aligns with the role assigned to the Tax Authority. It also contributes to the objectives of Oman Vision 2040 by diversifying income sources and reducing reliance on oil revenues, with targets of 15% of GDP by 2030 and 18% by 2040. Additionally, the tax aims to promote wealth redistribution among societal segments, enhancing social justice, while supporting the state budget and specifically financing part of the social protection system.

The Authority also affirms that the implementation of the personal income tax follows an in-depth study assessing its economic and social impact, based on income data from various government entities. The study established a carefully considered exemption threshold, revealing that approximately 99% of Oman’s population will not be subject to this tax.

Notably, the exemption threshold is set high at OMR42,000, and the tax rate is low at 5%. The law also includes deductions and exemptions accounting for social considerations in the Sultanate of Oman, such as education, healthcare, inheritance, zakat, donations, primary housing, and other factors.

Karima Mubarak Al Saadi, Director of the Personal Income Tax Project, confirmed that all necessary preparations and requirements for implementing the tax have been completed. The executive regulations of the law will be issued within one year of its publication in the Official Gazette.

She told Oman News Agency (ONA) that an electronic system has been developed by the Tax Authority to promote voluntary compliance and has been linked with the departments concerned to ensure accurate income calculation and verification of tax declarations. The Tax Authority has also strengthened its workforce through specialized training programs in line with the tax implementation requirements. Additionally, guidance manuals for natural and legal persons will be published according to a predetermined schedule.