MUSCAT – This update is expected to further develop the national tax system and enhance corporate social responsibility (CSR) initiatives across the Sultanate.
Under the new amendment, a provision has been added to Article 33 of the Income Tax Law allowing companies and institutions to deduct cash or in-kind donations made to officially registered endowment institutions, in accordance with the Endowments Law issued under Royal Decree No. 65/2000.
Before this amendment, Article 33 permitted deduction of donations only in three specific cases. With the addition of the new clause, the number of deductible donation categories has increased to four. The deductible cases now include:

1. Donations to ministries, government units, or other entities within the State’s administrative apparatus.
2. Donations to officially registered non-governmental charitable organisations or associations (Royal Decree No. 14/2000).
3. Donations to private entities operating in the sports sector and registered under Royal Decree No. 81/2007.
4. Cash or in-kind donations to registered endowment institutions (Royal Decree No. 65/2000).
   The Tax Authority clarified that deductible donations must not exceed 5 percent of the total taxable income during the tax year. Companies and institutions can declare these donations when completing their annual income tax return, which includes designated fields for claimable deductions.