Oman Tax & Audit Updates

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• 1.

• Implementation of Pillar Two – Global Minimum Tax
  Aligning with OECD/G20 initiatives, Oman has introduced a 15% domestic minimum tax effective January 1, 2025. This tax applies to multinational enterprises (MNEs) with global revenues exceeding EUR 750 million, ensuring they pay a minimum tax rate on profits, particularly targeting low-taxed foreign subsidiaries.

• 2.

• Tax Treaty Network Enhancements
  Oman has expanded its tax treaty network to prevent double taxation and curb tax evasion:

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  • Signed Double Taxation Avoidance Agreements (DTAAs) with Cyprus and Tanzania in December 2024, ratified in March 2025.

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  • Amended the existing tax treaty with India, with the protocol ratified in April 2025.

  These treaties are set to become effective from January 1, 2026, upon mutual ratification.

• 3.

• Tax Authority Reorganization and Compliance Emphasis
  The Oman Tax Authority (OTA) is undergoing internal restructuring to enhance efficiency:

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  • Establishing separate committees for tax objections to ensure independent assessments.

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  • Mandating prior appointments for in-person meetings with tax officials.

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  • Conducting assessments on companies that failed to file tax returns for the 2019 tax year, urging timely compliance to avoid penalties.

• 4.

• VAT Filing and Audit Preparedness
  Businesses are advised to ensure accurate VAT filings to prevent audits. Common triggers for VAT audits include:

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  • Delayed or missed VAT filings

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  • Large VAT refund claims

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  • Discrepancies between reported income and expenses

  To prepare for potential audits, companies should maintain comprehensive records, including:

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  • VAT returns and tax filings for the past five years

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  • Financial statements and bank records

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  • Sales and purchase invoices

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  • General ledgers and trial balances