Global Mobility Tax

Oman | Oman makes history: personal income tax law enacted via royal decree

Summary

On 22 June 2025, Oman took a historic step by introducing its very first personal income tax. This new law, effective from early 2028, is designed to apply primarily to high-income individuals. It marks a major milestone in the Gulf region and reflects Oman’s commitment to diversifying its economy and securing a more sustainable financial future as part of Vision 2040.

The detail

Oman’s fiscal direction

The introduction of personal income tax is designed to complement Oman’s current fiscal framework. It aims to support social protection programs and secure the country’s long-term economic sustainability. Understanding the broader impact of this reform will help you align your financial strategy with Oman’s Vision 2040 and the country’s evolving economic landscape.

What this means

With this move, Oman becomes the first country in the Gulf region to implement personal income tax, signaling a significant policy shift. The tax primarily targets high earners, leaving most residents unaffected while promoting more equitable revenue generation. New reporting and compliance measures will affect individuals and businesses, especially those with high incomes or international connections. Assessing how these changes affect your obligations will help you stay compliant—especially if you or your business are internationally active or fall within the higher income brackets.

Who is affected and how it works

Tax applies to individuals who are considered tax residents in Oman, targeting those with annual taxable income exceeding OMR 42,000. Only the amount above this threshold will be taxed at a flat rate of 5%. Income below this level is not subject to tax, effectively shielding the majority of residents.

In addition, non-residents may also be subject to tax on certain types of Omani-sourced income, depending on the final regulations and the nature of their activities in Oman. This makes it important for both residents and internationally mobile individuals to assess their exposure under the new regime.

Exemptions

The new personal income tax law includes several exemptions aimed at easing the burden on individuals in specific situations:

• A one-time exemption on foreign income earned outside Oman for up to two years.
• Exemptions for income from the sale of primary and secondary residences (the latter as a one-time exemption).
• Income from inheritance and gifts is exempt.
• Income from industrial property rights is exempt for five years after registration.

Allowable deductions

Taxpayers may benefit from a range of deductions to lower their taxable income under the new law:

• Interest on loans taken to finance the purchase or construction of a primary residence (one-time).
• Charitable donations, zakat, and endowments (waqf).
• Expenses related to education and healthcare.

Optimising your tax position by accurately tracking eligible expenses and planning future deductions accordingly will help you make the most of what’s available.

Compliance and administration

Taxpayers falling under the new law must submit accounts audited by licensed auditors approved by Oman’s Financial Services Authority. The Oman Tax Authority will oversee the new regime and is expected to issue detailed regulations over the next year, with guidance manuals to follow. Preparing now and staying updated on forthcoming regulatory guidance will help ensure compliance from the outset.

How we can help

Whether you’re an individual or a business, understanding how the new personal income tax law affects you is critical. Our experts deliver tailored impact assessments that go beyond the basics — helping you identify risks, uncover opportunities, and make informed decisions.

We support you at every step, from navigating complex compliance and audit requirements to maximising available deductions and exemptions under the new framework.

As Oman’s tax landscape continues to evolve, our team is here to ensure you’re always one step ahead with timely guidance and proactive solutions. Reach out to us for personalised support and real-time updates that help you stay compliant — and in control.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Michael Edmond
Partner

Jammy Mustafa
Director

Cody Reeves
Senior Associate

Want to know when a Regional Alert is posted?

Simply follow our Vialto Alerts page on LinkedIn and posts will be displayed on your feed. To ensure you don’t miss one, once you’re on our LinkedIn page, click on the bell icon under the banner image to manage your notifications.

Further information on Vialto Partners can be found here: www.vialtopartners.com

Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.

© 2025 Vialto Partners. All rights reserved.