Short answer: The corporate tax rate in Oman is a flat 15% on net profit, for Omani and foreign owned companies alike. Qualifying small companies pay 3%. Free zone companies can hold a corporate tax exemption of up to 25 to 30 years depending on the zone, oil and gas concessions are taxed at 55%, and large multinational groups face a 15% domestic minimum top-up tax from 1 January 2025. There is no personal income tax in Oman until 2028, so a shareholder draws profit from an already taxed company and pays nothing again.
Almost every investor who asks us about company registration asks about the Oman corporate tax rate in the same breath, usually after comparing the Sultanate with the UAE, Saudi Arabia and Qatar. The headline number is simple. What decides your actual bill is which of the four rates you fall under, what counts as taxable income, and when you have to file. This guide covers all three, with the dates that matter in 2026.
The four corporate tax rates in Oman
| Who | Rate | Basis |
|---|---|---|
| Most companies, Omani or foreign owned | 15% | Net taxable profit, Income Tax Law, Royal Decree 28/2009 |
| Qualifying small taxpayers | 3% | Net taxable profit, subject to the conditions below |
| Petroleum concession holders | 55% | Income from the sale of petroleum under an EPSA |
| Large multinational groups | 15% minimum | Domestic minimum top-up tax, from 1 January 2025 |
There is no separate branch profits tax and no surcharge on repatriated profit. A branch of a foreign company is taxed at the same 15% as a locally incorporated LLC or SPC.
Who qualifies for the 3% rate
The reduced rate is designed for genuinely small businesses, not for a large company split into pieces. A taxpayer must meet all of the following in the tax year:
- Registered capital of no more than OMR 50,000 at the start of the year
- Gross income of no more than OMR 100,000 in the year
- An average of no more than 15 employees during the year
- No activity on the excluded list, which covers banking, insurance and other financial services, air and sea transport, extraction of natural resources, public utility concessions and management fees
A new SPC set up by a consultant or a small trading business usually lands inside these limits in its first years. Confirm your position with the Oman Tax Authority before you rely on the 3% rate, because the conditions are tested year by year and a single one failing moves you back to 15% for that whole year.
What is actually taxable
Oman taxes net profit, not turnover. The main points a foreign owner needs to know:
- Worldwide income for a company resident in Oman, and Oman sourced income only for a non resident
- Deductions for costs wholly and exclusively incurred in producing the income, including salaries, rent, depreciation and financing costs within the thin capitalisation limits
- Losses carried forward for five years and set against future profits
- No capital gains tax as a separate tax; gains on business assets fall into ordinary taxable income
- No tax on dividends received by a shareholder, because profit has already been taxed at company level
- No personal income tax on the owner until 1 January 2028, when a 5% rate begins on personal income above OMR 42,000 a year
Withholding tax on payments abroad
A 10% withholding tax applies to certain payments made by an Omani company to a non resident with no permanent establishment in Oman, including royalties, research and development, management fees and payment for the use of computer software. Withholding on dividends and interest has been suspended by successive decrees rather than abolished, and the suspension has been extended more than once, so check the position in force on the date you pay rather than assuming last year's answer still holds.
Oman has a growing double tax treaty network, and a treaty can reduce or remove the 10% where it applies.
Filing dates and penalties
| Obligation | Deadline |
|---|---|
| Tax year | The calendar year, unless a different accounting period is approved |
| Provisional return and payment | Within 3 months of the end of the tax year |
| Final return, audited accounts and balance of tax | Within 6 months of the end of the tax year |
| VAT returns | Quarterly, where registered |
VAT registration is compulsory once taxable supplies pass OMR 38,500 in a rolling twelve months, and voluntary from OMR 19,250. The standard VAT rate is 5%, the lowest in the GCC.
Late filing and late payment both carry penalties, and the Tax Authority applies additional tax on unpaid amounts. Registering for tax and obtaining a tax card shortly after incorporation is part of the normal post registration checklist, not an optional step.
Free zones and the special economic zone
Companies licensed in Salalah Free Zone, SOHAR Port and Freezone, Al Mazunah Free Zone and the Special Economic Zone at Duqm can hold a corporate tax exemption running up to 25 to 30 years depending on the zone, along with customs duty exemption on imports and re exports and lower Omanisation quotas. The trade off is market access: a free zone company is built for export, re export and in zone activity, while a mainland LLC can sell freely across Oman. Our guide to free zone company registration in Oman compares the zones side by side.
How Oman compares in the GCC
| Country | Standard corporate tax | Personal income tax |
|---|---|---|
| Oman | 15%, 3% for small companies | None until 2028, then 5% above OMR 42,000 |
| UAE | 9% above AED 375,000 | None |
| Saudi Arabia | 20% on foreign owned share | None |
| Qatar | 10% | None |
The UAE headline rate is lower, but the comparison rarely ends there. Oman allows up to 100% foreign ownership in most sectors with no local partner, has no minimum capital requirement for an LLC, and gives a property owner a renewable residency without an employer. Our Oman versus UAE company setup comparison puts the full cost of both side by side.
FAQ
What is the corporate tax rate in Oman in 2026?
A flat 15% on net taxable profit for most companies, Omani or foreign owned, under Royal Decree 28/2009. Qualifying small taxpayers pay 3% and petroleum concession holders pay 55%.
Do foreign owned companies pay more corporate tax in Oman?
No. There is no separate rate for foreign ownership. A 100% foreign owned LLC, an SPC and a branch of a foreign company are all taxed at 15%.
Is there tax on dividends in Oman?
A shareholder receiving a dividend from an Omani company pays no further tax on it, because the profit was already taxed at company level. Withholding tax on dividends paid abroad has been suspended rather than abolished, so confirm the current position before you distribute.
When does corporate tax have to be paid in Oman?
A provisional return and payment are due within three months of the end of the tax year, and the final return with audited accounts and the balance of tax within six months.
Is there VAT in Oman?
Yes, at 5%, in force since April 2021. Registration is compulsory once taxable supplies pass OMR 38,500 in a rolling twelve months.
Can a company in Oman be tax exempt?
Yes, inside a free zone or the Duqm special economic zone, where exemptions run up to 25 to 30 years depending on the zone and the activity.
Next step
Tell us the activity, the expected turnover and where you intend to sell, and we will tell you whether a mainland LLC, an SPC or a free zone entity leaves you with the lower total cost, including tax, licensing and Omanisation. Irfan Investment Group handles company formation, licensing, corporate banking and investor residency in Muscat.
Related guides
- Company formation cost in Oman
- Taxes in Oman for investors and companies
- Company registration in Oman free zones
- Oman versus UAE company setup
- 100% foreign ownership and the negative list
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