Muscat: According to recent figures, medium-sized companies in Oman spend just 68 hours a year, roughly 5 to 6 hours monthly, to prepare, file, and pay taxes. This is dramatically lower than both the MENA regional average of over 200 hours and the global average of 234 hours, underscoring Oman’s progress in reducing administrative burdens on businesses.

A key driver of this efficiency is the Sultanate’s commitment to digitization. Since March 2020, all taxpayers have been required to submit tax returns and payments online through a dedicated electronic portal. Manual submissions are no longer accepted, enabling businesses, especially foreign investors, to meet obligations from any location worldwide. VAT procedures, introduced in 2021 at a low rate of 5 percent, are also fully digital, with quarterly returns filed electronically within 30 days. The Tax Authority has issued sector-specific digital guidelines to further ease voluntary compliance.

Oman’s corporate tax rate remains competitive at 15 percent, with no personal income tax. The effective tax burden on companies stands at about 27.4 percent of gross profit, comparable to or lower than many industrialised economies where corporate rates range between 20 and 30 percent. While some GCC states offer lower or zero corporate tax for foreign investors, Oman’s stability, clarity, and transparent framework offer long-term predictability attractive to international firms.

Significant incentives further strengthen the investment climate. Special economic zones and free zones offer tax exemptions, some for up to 10 years, and in certain cases up to 25 years, alongside 100 percent foreign ownership and zero corporate tax during the incentive period. These advantages significantly enhance project returns in their early stages, a critical period for investors.

Legal expert Dr. Khalifa bin Saif Al Hinai, founder of Khalifa Al Hinai Law Firm, noted that Oman’s tax system is evolving in line with international norms. “Like any new legislation, observations emerge in the early stages, but development continues over time. Good tax application ultimately benefits the country,” he said. He emphasized the importance of providing facilities for both traders and individuals, especially if personal income tax is implemented in the future. “The real investor knows there must be fees and taxes,” he added, stressing that Oman’s ongoing efforts to simplify procedures will continue to attract strong investment.

From the business community’s perspective, Abdul Latif Mohiuddin Khonji, Board Member at the Oman Chamber of Commerce and Industry and Chairman of the Foreign Investment Committee, highlighted Oman’s “predictable and transparent” tax framework. He cited the 15 percent corporate tax, absence of income tax on individuals, and generous free zone incentives as central factors that have made Oman “one of the most attractive environments in the GCC for long-term investment.”

Khonji also pointed to the low 5 percent VAT and the presence of over 40 double taxation avoidance agreements as additional trust-builders for international investors. He noted that while the system is robust, minor refinements would help address sector-specific challenges, for instance, easing requirements around deductibility of outstanding insurance claims in the healthcare sector to avoid legal friction with insurers.

Oman’s alignment with global transparency standards, including the Common Financial Reporting Standard (CRS) and cooperation with the World Bank, further enhances its credibility. The nation also ranks well on the “ease of paying taxes” index, reflecting low payment delays and minimal enforcement requirements.

Overall, the Sultanate’s tax environment is viewed as balanced, efficient, and pro-investment, combining moderate tax rates, strong digital transformation, limited administrative burdens, and forward-looking incentives.