Oman: Personal Income Tax Law Issued

2 July 2025 - The Sultanate of Oman will introduce personal income tax at 5% effective 1 January 2028. Various sources of income are included in the scope of income tax, including employment income, self-employment income, rental income, pensions, and income earned from Board duties. Employers are required to withhold income tax on salaries, pensions, end of service benefits and board remuneration. Late payment of tax can incur penalties of up to 1% of the unpaid amounts. 

It is crucial for both employers and taxpayers to take preparatory steps to ensure compliance and readiness by the go-live date.

Employers should:

• Begin preparing for the implementation of income tax by establishing robust systems for withholding income tax from employees' wages, pensions, end-of-service benefits, and board remuneration. 
• Develop protocols for remitting tax and submitting tax returns on behalf of employees who earn income solely from salaries, pensions, or board remuneration, upon their request.
• Strengthen record-keeping practices to support tax compliance and facilitate audits, ensuring all necessary documentation is readily available when the law comes into effect.

The Tax Authority of Oman is expected to release additional guidance and detail prior to implementation. 

In the attached alert, we provide key highlights of Oman’s newly introduced personal income tax regime, including the applicable tax rate, scope of taxable income, filing obligations, and important considerations for both employers and individual taxpayers as they prepare for the law’s implementation from 1 January 2028.

Notice

This alert has been written in general terms and does not constitute any form of advice or recommendation by Deloitte and, therefore, cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we highly recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Deloitte accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action due to any material in this publication.

Deloitte Middle East would be happy to help readers understand how to apply the principles set out in this publication to their specific circumstances. 

Contacts

Our Tax experts listed below would be happy to discuss the above matters in more detail, or support you through a further discussion on your specific requirements.