Income Tax in Oman Becomes Official: 5% Tax on High Incomes from 2028

A New Chapter in Oman’s Fiscal Reforms Begins with Royal Decree

Muscat, 23 June 2025
Through Royal Decree No. 56 / 2025 issued by His Majesty Sultan Haitham bin Tarik, Oman has officially enacted—for the first time in its history—a personal income tax law. According to this legislation, starting from January 2028, individuals with higher annual incomes will be required to pay a 5% tax on their taxable earnings.

Who Will Be Subject to the Tax?

Under the new law, only individuals earning more than OMR 42,000 per year (approximately USD 109,000) will be subject to the income tax. Those earning below this threshold will be fully exempt. In fact:

According to official government assessments, 99% of Oman’s population will not be taxed under this law.

Key Features of Oman’s New Income Tax Law

• Comprises 76 articles across 16 chapters
• Flat tax rate: 5% of taxable income
• Includes exemptions and reliefs for underprivileged regions, low-income families, retirees, and individuals with special medical needs
• Full implementation begins on 1 January 2028, with executive regulations to be issued within one year

Why Was This Law Introduced?

The law aligns with the goals of Oman Vision 2040 and aims to:

• Diversify government revenue sources and reduce reliance on oil
• Promote social justice and redistribute income across population segments
• Help fund essential welfare sectors such as education, healthcare, and housing

Conclusion

With the implementation of Oman’s personal income tax law, the country has taken a bold step toward fiscal reform, sustainable development, and social equity. If you’re living in Oman or planning to invest, work, or settle here, now is the time to assess how this new tax policy may affect you.

Connsect is here to help you understand the law’s impact and offer tailored guidance.