Aqid ERPThe two rates
The Tax Authority lists a rate of 15% of net taxable income for establishments and commercial companies, and a reduced rate of 3% for small enterprises that meet specific conditions. Taxable income starts from the profit in your accounts for the year, so a clean profit and loss account is the first thing the return needs.
Very large groups are a separate matter: Royal Decree 70/2024 brought in a top-up tax on Omani entities of multinational groups. A small or medium business is not in that regime.
Who qualifies for the 3% rate
The lower rate applies only when every condition below is met. Miss one, and the year is taxed at 15%.
- Its registered capital is no more than OMR 60,000.
- Its gross income for the tax year is no more than OMR 150,000.
- It has no more than 25 workers.
- It is not an occupational (professional) activity; the Income Tax Law leaves the list of these to a ministerial decision.
One return, and when it is due
Taxpayers at 15% file their annual return within four months of the end of the tax year, and those at 3% within three months; for a year ending on 31 December, the 15% return is due by 30 April.
The tax is payable by the deadline for the return. Returns and payments go through the Tax Authority's portal, tms.taxoman.gov.om.
The Tax Authority's FAQ also describes an exemption from the tax itself for small establishments that meet these conditions and further ones, such as an owner or partner who manages the business full time and is not employed elsewhere. An exemption does not remove the duty to file. Check with the Tax Authority before you rely on the 3% rate or on an exemption.
Penalties
- Late payment: additional tax of 1% a month on the unpaid tax, from the due date until it is paid.
- Late filing or failing to file: the Chairman of the Tax Authority may impose a fine of OMR 100 to OMR 2,000.
Withholding tax, and the personal income tax to come
- A payment to a non-resident for royalties, research and development, the use of computer software, management fees or services, dividends or interest carries withholding tax of 10% of the gross amount. The payer pays it to the Tax Authority by the 14th day after the end of the month it paid or credited the amount. A tax treaty can lower the rate.
- Royal Decree 56/2025 brings in a personal income tax from 2028: 5% on residents whose annual income exceeds OMR 42,000, after deductions such as education, health, housing, zakat and donations. Its executive regulation is still to come.
A worked example
An Omani LLC with OMR 20,000 of registered capital, OMR 140,000.000 of gross income, an average of 12 employees, a trading activity and OMR 30,000.000 of taxable income for the year:
| Taxable income | OMR 30,000.000 |
|---|---|
| Tax at 3% (every condition met) | OMR 900.000 |
| Tax at 15% (if one condition fails) | OMR 4,500.000 |
| The 3% tax paid two months late: 1% × 2 × 900.000 | OMR 18.000 |
How Aqid ERP helps
Aqid ERP does not compute Oman's income tax or file the return; you or your adviser do that on the Tax Authority's portal. What it gives you is the year the return starts from: an append-only ledger in three-decimal rials on an Omani chart of accounts, and the profit and loss, balance sheet, cash flow and statement of changes in equity for any period, in Arabic and English.
The year-end close moves the profit into retained earnings and locks the year, so later corrections post to the open year and the figures behind your return stay as they were. Your accountant or tax adviser can work in the same books with their own sign-in. Withholding tax on payments to foreign suppliers is recorded on the bill by category; you file that return with the Tax Authority.