Assessment, collection and recovery of tax are the major source of income for any civilized nation. The Royal Decree No: 47/81 promulgated in the year and known as the Law of Income Tax on Companies and the subsequent amendments made there under, deals with the determination of income chargeable to tax, deductions permitted, assessment authorities, accounting period, collection and recovery of tax, penalties, appeals etc. We have extensive experience and expertise in acting for and advising clients on the Tax law, and the regulations and practice there under. It is an admitted fact that all corporate groups and the business community in general are entangled with tax related problems on the eve of every accounting year and our endeavor is to provide specialized service to our clients on such matters.
The most important tax in Oman is the tax on business income, which is based upon the Corporate Income Tax Law of 1981 and subsequent Royal and Ministerial Decrees. Taxable entities are entities that have a permanent establishment in the country, so that any entity that has personnel present in Oman taxed. Taxable income includes business profit, interest, royalties and capital gains, and is computed on the net income arising in Oman or deemed to have risen in Oman after deducting all ordinary expenses, such as expenditure incurred in producing the gross revenue, bad debts, auditors’ fees, depreciation, head office expenses, sponsorship fees and certain donations. Losses may be carried forward for up to five years.
The tax rates vary in accordance with the amount of taxable income and the percentage of Omani ownership. Tax holidays granted under the investment incentives laws also provide a reprieve.