Issuance of Personal Income Tax (PIT) Law

His Majesty Sultan Haitham bin Tarik issued a Royal Decree No. 56/2025 on Personal Income Tax Law. The law consists of (76) seventy-six Articles, divided into (16) sixteen Chapters, and itis imposed on a natural person whose total income exceeds (42,000) OMR forty-two thousand Omani riyals annually, earned from certain types of income according to conditions specified by law. The tax rate is (5%) five percent of the taxable income. The law will enter into force at the beginning of 2028.                                                             

The PIT law aims at completing the tax system in line with the economic and social situation in the Sultanate of Oman, and with the role mandated to the Tax Authority. In addition to its contribution to achieving the objectives of Oman Vision 2040 by diversifying sources of income and reducing dependence on oil, as it is targeted to reach (15%) by 2030, and (18%) by 2040 of GDP. It will also contribute to achieving the social justice by redistributing the wealth among the segments of society, provide the support to the general budget of the country, and be directed in particular to finance part of the costs of the social protection system.                                                                                           

The implementation of PIT law came in light of the results of an in-depth study to assess the economic and social impact. The exemption threshold was set and considered carefully based on income data collected from several government entities. The results showed that approximately 99% of the population in the Sultanate of Oman is not subject to this tax.                                  

It is worth noting that the exemption threshold is considered high, as it amounts to 42,000 OMR, and the specified tax rate is 5% which is considered low. The law also includes deductions and exemptions that take into account the social situation in the Sultanate of Oman, such as education, healthcare, inheritance, zakat, donations, primary housing, etc.                                                         

Ms. Karima bint Mubarak Al Saadi, Director of Personal Income Tax, confirmed the completion of all necessary preparations and requirements for the implementation of the tax. The executive regulations of the law will be issued within one year from the date of the law's publication in the Official Gazette. The Tax Authority’s electronic system has been designed to enhance voluntary compliance and linked with relevant institutions to ensure accurate calculation of individuals’ income and to verify the accuracy of submitted tax returns. Moreover, the human resources at the Tax Authority have been trained in accordance with the requirements for implementing the tax, and the guidance manuals have been prepared for individuals and legal persons, which will be published gradually according to a specified timetable.