Following a Royal Directive, the Capital Market Authority Oman (CMA) announced on 15 May 2019 that His Majesty Sultan Qaboos bin Said has approved the suspension of Oman’s withholding tax (WHT) on dividends and interest.
This suspension, as per the announcement, begins from 6 May 2019, is valid for a period of three years and can be extended for further periods if required.
The Royal Directive is aimed at attracting foreign investment and boosting the securities market. The Ministry of Finance had, following representations from the business community, initiated the WHT suspension request in 2017 after the Income Tax Law was amended by Royal Decree No. 9/2017 to introduce WHT on dividends and interest.
The WHT suspension on interest will potentially benefit all payers and, on dividends, will benefit joint stock companies—other forms of companies were not subjected to dividend WHT.
The above Royal Directive is prospective in nature. Consequently, WHT on dividends and interest prior to 6 May 2019 will continue to apply based on the existing law.
The CMA also highlighted that the government is revising the Foreign Capital Investment Law (FCIL) to open the market to foreign investors by granting 100 percent foreign ownership and a reduction in minimum capital requirements. This change reflects efforts to promote infrastructure development, provide capital to domestic companies and generate job opportunities for nationals. The revised FCIL law is expected to be enacted this year.
© 2020 KPMG Lower Gulf Limited, registered in the UAE and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the United Arab Emirates. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.