Personal Income Tax FAQs

1. Do all workplaces whether government, private, or foreign companies practicing an activity in the Sultanate of Oman be obliged to deduct the tax for the Tax Authority in case that salaries or wages exceed 42,000 OMR during the year?

Yes, all the sectors will be obliged to deduct the tax.

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2. Are the rewards of Shura Council and State Council members subject to the provisions of PIT law?

Yes, one of the sources of income that will be included in the total income.

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3. Are the retirements pensions considered one of income sources that subject to PIT?

Yes, one of the sources of income that will be calculated within the total income.

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4. What does total income mean?

All cash amounts and in-kind benefits received by a resident taxpayer in the Sultanate of Oman or abroad, and those which are received by a non-resident taxpayer only in the Sultanate of Oman.

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5. What is the net income?

All amounts exceeding 42,000 OMR of the total income.

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6. What does taxable income mean?

Net income after deducting the value of exemptions, costs, losses and exemptions approved under international agreements.

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7. Can the tax paid in foreign country be deducted if it is not related to an activity or business conducted in the Sultanate of Oman?

The taxpayer is only allowed to deduct foreign tax that is directly related to income sources considered taxable in the Sultanate of Oman

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8. Who is obliged to pay the tax?

The natural person, whether resident or non-resident.
Employers obligated to withhold the tax from the individual and remit it to the Tax Authority. This includes administrative units of the State.
Administrative units of the State and other legal entities, both public and private, such as institutions, companies, establishments, and private sector units that conduct activity in the Sultanate of Oman.

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9. Are all residents in the Sultanate of Oman subject to the provisions of PIT law?

Yes, all residents whose total annual income exceeds 42,000 OMR shall submit the tax return.

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10. Are all residents living in Oman subject to tax?

Any person who stays in the Sultanate of Oman for more than 183 days is considered a tax resident, whether Omani or non-Omani.

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11. How to differentiate between a tax resident and non-tax resident?

The number of days of residence (183 days) is continuous or intermittent during the year.If the period of residence exceeds 183 days, the person is a tax resident, and if it is less, the person is not a tax resident.

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12. Is the salary the only source that will be subject to tax if it exceeds 42,000 OMR?

No, there are a number of sources according to the law that will be subject to the PIT. In the event that the total income exceeds 42,000 OMR, the taxable income will be calculated.

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13. What is the PIT rate that is applied in case that the total income exceeds 42,000 OMR?

%5

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14. A person who has not received part of his allowances for two years. He filed a grievance with the court and won the case for an amount exceeding 30,000 OMR. Worth mentioning that his monthly salary received is 1.500 OMR, so is he subject to tax?

Yes, the person is subject to the amount received since the amount is the result of compensation on salaries.

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15. A person does not hold a commercial registration (CR), but practices photography as a profession and sells photos, earning an annual income of OMR 50,000. Is this person subject to income tax?

Yes, the person is subject to tax, as their income exceeds OMR 42,000.

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16. Is the person entitled to deduct expenses incurred during the tax year, such as the purchase of a camera or specialized equipment?

Yes, the person is entitled to deduct expenses and has two options for doing so:

Deduct 15% of the total gross income from self-employment, or
Deduct the actual expenses incurred, provided that all supporting documents are retained as a proof.

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17. A person rents a residential building and gets an annual income exceeding 42,000 OMR but he does not have any commercial stores. As stipulated in VAT law, the person is exempt from tax since the building is for housing use only but according to PIT law, is he exempt?

According to PIT law, the exemption is not allowed, as the residential rent obtained is subject to the tax unlike the VAT law.

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18. Is a person entitled to deduct the costs of improvements incurred during the tax year, such as additions to the property?

Improvement costs are not allowed to be deducted from annual expenses, but are allowed in case of the disposal of building.

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19. A person who writes books and receives royalties of 50,000 OMR, but he spends 5,000 OMR for printing these books. Is he allowed to deduct these expenses?

Expenses are not allowed to be deducted as mentioned in the royalties item.

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20. A non-tax resident who provided a consultancy service to a government body in the Sultanate of Oman, and Withhold tax was deducted at a rate of 10% in accordance to Income Tax Law No.28/2009. Will 5% of the total be deducted based on the provisions of the Personal Income Tax?

No, according to the law, Article (18) bis of the Income Tax Law has been repealed, and thus the person becomes subject to the provisions of the PIT law as he did not complete a period of 183 days in the Sultanate of Oman. Therefore, the procedure is wrong and the government body shall only deduct 5%.

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PIT FAQs

1. Do all workplaces whether government, private, or foreign companies practicing an activity in the Sultanate of Oman be obliged to deduct the tax for the Tax Authority in case that salaries or wages exceed 42,000 OMR during the year?

2. Are the rewards of Shura Council and State Council members subject to the provisions of PIT law?

3. Are the retirements pensions considered one of income sources that subject to PIT?

4. What does total income mean?

5. What is the net income?

6. What does taxable income mean?

7. Can the tax paid in foreign country be deducted if it is not related to an activity or business conducted in the Sultanate of Oman?

8. Who is obliged to pay the tax?

9. Are all residents in the Sultanate of Oman subject to the provisions of PIT law?

10. Are all residents living in Oman subject to tax?

11. How to differentiate between a tax resident and non-tax resident?

12. Is the salary the only source that will be subject to tax if it exceeds 42,000 OMR?

13. What is the PIT rate that is applied in case that the total income exceeds 42,000 OMR?

14. A person who has not received part of his allowances for two years. He filed a grievance with the court and won the case for an amount exceeding 30,000 OMR. Worth mentioning that his monthly salary received is 1.500 OMR, so is he subject to tax?

15. A person does not hold a commercial registration (CR), but practices photography as a profession and sells photos, earning an annual income of OMR 50,000. Is this person subject to income tax?

16. Is the person entitled to deduct expenses incurred during the tax year, such as the purchase of a camera or specialized equipment?

17. A person rents a residential building and gets an annual income exceeding 42,000 OMR but he does not have any commercial stores. As stipulated in VAT law, the person is exempt from tax since the building is for housing use only but according to PIT law, is he exempt?

18. Is a person entitled to deduct the costs of improvements incurred during the tax year, such as additions to the property?

19. A person who writes books and receives royalties of 50,000 OMR, but he spends 5,000 OMR for printing these books. Is he allowed to deduct these expenses?

20. A non-tax resident who provided a consultancy service to a government body in the Sultanate of Oman, and Withhold tax was deducted at a rate of 10% in accordance to Income Tax Law No.28/2009. Will 5% of the total be deducted based on the provisions of the Personal Income Tax?