Oman Introduces Personal Income Tax for High Earners
Oman has introduced a new income tax law. People who earn more than OMR 42,000 per year will now have to pay 5% tax on their income.
But most people in Oman won’t have to worry — the Tax Authority says that about 99% of the population will not be affected by this new tax.
This new law is called the Personal Income Tax Law and was issued under Royal Decree No. 56/2025. It is the first time Oman has applied a personal income tax. This law is part of Oman’s plan to improve the economy and reduce its dependence on oil, as part of Oman Vision 2040.
Who Doesn’t Have to Pay Tax? (Exemptions)
Article 25 of the new law lists 16 types of income that will not be taxed:
Salaries of foreign diplomats working in Oman (if their countries treat Omani diplomats the same way).
Allowances given to Omani citizens working in foreign embassies (not including actual diplomats).
Income earned abroad by Omani residents for up to 18 months after they move.
Salaries earned overseas by Omani tax residents.
Pension and retirement benefits, limited to two schemes.
Education expenses for the person, their spouse, and close family (within limits).
Healthcare expenses for the person, spouse, close family, and siblings in their care (as per rules).
Rental income from the main home, if declared to the Tax Authority for at least two years.
Profit from selling a second home, allowed once only.
Zakat and donations to approved charities or religious bodies, up to 5% of total income.
Earnings from government investment certificates, including when sold.
Interest from government bonds and treasury notes, including profits from sales.
Compensation money, not part of salary or wages.
Gifts and inheritance between spouses or close family members.
Interest on home loans for the main house — one-time exemption in a lifetime.
Income from intellectual property (like patents or trademarks) — tax-free for 5 years after registration.
These exemptions show Oman’s effort to:
Protect low-income families
Support education, health, and family needs
Encourage donations and innovation
This new tax system also follows global best practices while helping Oman build a stronger, more balanced economy.
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