Oman is planning to implement a personal income tax framework in the Sultanate.
According to the Oman News Agency, the Shura Council has moved the draft law of personal income tax to the State Council, suggesting that the introduction of the tax is gaining legislative momentum.
However, they are considering imposing a relatively low tax to remain a competitive destination for foreign business travellers.
If the decision gets approved, this will mean that personal income tax will be the first ever in the GCC region. As a result, it could have a major impact on high-earning foreign workers and wealthy Omani citizens. Many experts believe this may serve as a model for other GCC nations, encouraging them to consider similar tax reforms.
Thomas Vanhee, the founding partner of boutique tax advisory services firm Aurifer, believes that "the likelihood of the legislation being enacted is high. The Council of State would normally only make technical comments on the legislation."
The initial draft was introduced back in 2022 and was aimed at targeting high-income earners.
The proposed plan is to tax citizens on net global income above $1 million and foreign nationals on Oman-sourced income above $ 100,000 respectively.
Moreover, the expected tax rates range between 5% and 9% for foreign nationals, and a flat rate of 5% for Omanis above the specified threshold, though the exact rates and further details are yet to be finalised.
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