Taxation of international executives
Are there social security/social insurance taxes in Oman? If so, what are the rates for employers and employees?
The Social Security Law provides social protection for Omani employees who are holding a permanent job in the private sector and who are between 15 and 59 years of age. It may be extended to expatriate employees working in the private sector by a decision from the Ministry.
The Public Authority for Social Insurance (“PASI”) administers the social security law. Subscription to the social security system is mandatory for all employers employing Omani employees, who must arrange to subscribe on behalf of their Omani employees and pay the subscription premium. The social security covers:
Every company or establishment employing Omani employees must make a contribution equal to 10.5 percent of gross salaries of its Omani employees monthly to PASI. The employee must pay 7.0 percent of their gross salary and the Government would pay another 5.5 percent of the total gross salaries of all secured employees to PASI every month.
Every company or establishment employing Omani employees must pay a further 1 percent of the total gross salaries of their Omani employees monthly to PASI for security against occupational injuries and diseases.
Every employer is obliged to register with PASI the new Omani employees and pay contributions for every month within 15 days of the next month. Failure to do so could result in penalties being imposed.
The employer and employee contributions stated above are calculated on the aggregate of basic salary and allowances paid in cash and in-kind, i.e. the employee’s total gross salary, rather than basic salary, as was previously the case. The gross salary to be included in the calculation is limited to a monthly gross salary amount of OMR3,000.
End of service benefit for expatriate employees - an end-of-service benefit (often referred to as “gratuity”) is payable to each expatriate employee with 1 year or more of continuous service. The benefit is based on the employee’s final basic salary and the entitlement is:
Are there any gift, wealth, estate, and/or inheritance taxes in Oman?
None for individuals.
Are there real estate taxes in Oman?
None for individuals. Transfer of ownership of real estate may entail 5 percent levy by the Ministry of Housing.
Are there sales and/or value-added taxes in Oman?
While Oman does not have a VAT regime in place at the moment, it has expressed its intention to implement VAT in line with other GCC countries/territories. The Ministry of Finance had earlier confirmed preparations to target VAT introduction in Oman in September 2019, though the actual date of enforcement is currently under review and has not yet been finalized.
Are there unemployment taxes in Oman?
Are there additional taxes in Oman that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.
The GCC has a common customs duty regime which imposes a flat 5 percent customs duty on the majority of goods entering the GCC. Personal effects and used household items brought into the country by the nationals residing abroad or the foreigners coming for the first time for residence in the country are exempt from customs duties, subject to the prescribed conditions and controls.
Oman has recently published the Selective / Excise Tax Law (on 13 March 2019), which will take effect 90 days after its publication in the Official Gazette (i.e. expected by mid-June 2019. Excise tax is expected to be levied at 50 percent on carbonated drinks and 100 percent on alcohol, energy drinks, tobacco products and pork products.
It is also proposed to introduce VAT on goods and services in 2019.
Oman does not have personal income tax except for the withholding tax at the rate of 10 percent on the specified payments mentioned above in detail.
Will a non-resident of Oman who, as part of their employment within a group company, is also appointed as a statutory director (i.e. member of the Board of Directors in a group company situated in Oman) trigger a personal tax liability in Oman, even though no separate director's fee/remuneration is paid for their duties as a board member?
There is no personal income tax in Oman. It may be further noted that payments to non-resident directors for board meetings is exempt from Oman withholding tax (of 10 percent).
a) Will the taxation be triggered irrespective of whether or not the board member is physically present at the board meetings in Oman?
b) Will the answer be different if the cost directly or indirectly is charged to/allocated to the company situated in Oman (i.e. as a general management fee where the duties rendered as a board member is included)?
c) In the case that a tax liability is triggered, how will the taxable income be determined? Not applicable
All information contained in this document is summarized by KPMG Tax, the Oman member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on the the Income Tax Law No. 28/2009, which became effective on 1 January 2010 and the Executive Regulations to the Income Tax Law which came into force on 29 January 2012. Changes were made to the Oman’s Tax Law and to the executive regulations by Royal Decree 9/2017 issued on 19 February 2017 and Ministerial Decision No. 14/2019 respectively.
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KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. 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.