Submit RFP

      On 22 June 2025, Oman issued Royal Decree No. 56/2025 promulgating Oman’s “Personal Income Tax Law.”  The law will be published on 29 June 2025, and come into effect on 1 January 2028. While the official text of the law is awaited, some details have been published by the Oman Tax Authority and media outlets.1, 2 (For prior coverage, see GMS Flash Alert 2024-172, 26 August 2024.)

      The law introduces a five-percent income tax on natural persons whose annual gross income exceeds OMR 42,000 (approximately USD 109,200). Gross income would include receipts in cash and kind.

      Executive regulations are expected within one year of the date of publishing the law in the “Official Gazette.”

      WHY THIS MATTERS

      Businesses and individuals in Oman should be mindful of the possible implications the introduction of a personal income tax regime will have.  Employers (payroll/finance/tax) should examine their current capabilities to operate payroll withholdings for employees and facilitate payroll reporting obligations once the tax comes into effect.  Employers should start looking at their existing and future employment contracts, salary and benefits structure, and their talent attraction and retention strategies, in light of the changing landscape.

      Individuals in Oman should consider the impact a personal income tax would have on their income source(s) and compliance obligations.

      Early announcement of the introduction of personal income tax allows businesses and individuals a limited window of opportunity to prepare for compliance and appropriate next steps.  

      More Details

      The taxable income calculated after subtracting exemptions, deductions, and losses from gross income may include:

      • salary;
      • income from immovable property;
      • income from industrial / intellectual property.

      Exemptions may include:

      • income earned outside Oman (granted one time for a period of two years);
      • capital gains on sale of a primary residence;
      • capital gains on sale of a secondary residence (one-time);
      • income from inheritance and gifts;
      • income from industrial property rights (granted for five years from date of registration).

      Deductions from taxable income may include:

      • education expenses;
      • health-care expenses;
      • zakat3, charitable donations, and endowments (“waqf”);
      • interest on loans financing the acquisition or construction of an individual’s main residence (one-time).

      KPMG INSIGHTS

      This marks a historic fiscal milestone for Oman and the wider Gulf Cooperation Council (GCC) region, with Oman becoming the first GCC country to announce a personal income tax regime.

      The introduction of the personal income tax serves to complete Oman’s tax system (which already is comprised of corporate income tax, value added tax, excise tax and customs) and helps fund the country’s social protection system.  It also aligns with the Oman Vision 20404 and supports long-term economic diversification by targeting non-oil GDP contributions, reducing hydrocarbon reliance, and reinforcing social protection programs.

      With one of the highest exemption thresholds and lowest rates globally, it is expected that 99 percent of the population will be unaffected, according to the Oman Tax Authority, and this could be seen as a socially-sensitive approach, one that promotes equity and supports public welfare without burdening lower income groups.

      If you need assistance with personal income tax or other tax-related matters in Oman, it is recommended you consult with your usual qualified tax professional or the dedicated team of experienced personal income tax specialists at KPMG in Oman (see the Contacts section).

      FOOTNOTES:

      1  (See in English and Arabic) "Royal Decree 56/2025 Issuing the Personal Income Tax Law," on the website of Decree (a database of English translated Omani laws available on the internet).  Please note that by clicking on this link you are leaving the KPMG website for an external site (non-governmental, non-KPMG), that KPMG is not affiliated with nor does KPMG endorse its content.  The use of the external site and its content may be subject to the terms of use and/or privacy policies of its owner or operator.

      2  See (in English and Arabic) under News & Events, “Issuance of Personal Income Tax (PIT) Law” (Published 6/22/25) on the website of the Sultanate of Oman Tax Authority.

      * See (in English) See "Personal Income Tax Law to take effect in Oman," Times of Oman (22 June 2025) at: https://timesofoman.com/article/159553-personal-income-tax-law-to-take-effect-in-2028.

      * "Oman to implement personal income tax in 2028, targets high earners," Gulf Business (June 24, 2025) at: https://gulfbusiness.com/oman-to-implement-personal-income-tax-in-2028/.

      * "Personal Income Tax Law to Take Effect in 2028," Oman News Agency (22 June 2025) at: https://omannews.gov.om/topics/en/80/show/122971/.

      Please note that by clicking on the above “starred” links you are leaving the KPMG website for an external site (non-governmental, non-KPMG), that KPMG is not affiliated with nor does KPMG endorse its content.  The use of the external site and its content may be subject to the terms of use and/or privacy policies of its owner or operator.

      3  Zakat, one of the Five Pillars of Islam, is a form of charity or almsgiving in Islamic context.  In the Sultanate of Oman, zakat is calculated based on a Muslim individual’s wealth to a certain extent and is institutionally supported.

      4  (In English) Oman Vision 2040, “Vision Overview.”   

      RELATED RESOURCE

      This article is excerpted, with permission, from “Oman announces the introduction of Personal Income Tax effective 1 January 2028,” in Oman Tax Flash, a publication of the KPMG Intenrational member firm in Oman. 

       

      OMR 1 = EUR 2.216
      OMR 1 = USD 2.59
      OMR 1 = =GBP 1.89
      OMR 1 = SAR 9.745
      OMR 1 = INR 222.51
      Source: www.xe.com 

      Contacts

      Pranav Shah
      Pranav Shah

      Director

      KPMG in the United Arab Emirates

      Hussein Al Lawati
      Hussein Al Lawati

      Associate Director, Tax

      KPMG in Oman

      Keelin Kane
      Keelin Kane

      Manager

      KPMG in the United Arab Emirates

      More Information

      pdf

      Download PDF

      Download and save the PDF version of this GMS Flash Alert.

      Download

      GMS Flash Alert reports on recent global mobility-themed developments from around the world to help you better understand what has changed and what that means for you.

      Subscribe now

      GMS Flash Alert

      Shedding light on evolving policies affecting international assignees and employers, helping make sense of it all.

      Visit GMS Flash Alert home
      alt
      Disclaimer

      The information contained in this newsletter was submitted by the KPMG International member firm in Oman.

      GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

      © 2025 KPMG Lower Gulf Limited, KPMG LLP and KPMG LLC, licensed in the United Arab Emirates and the Sultanate of Oman, and member firms of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.