OMAN LAW AND PRACTICE Contributed by: Said Al-Shahry, Thamer Al-Shahry, Jeremy Pooley, Maria Mariam Rabeaa Petrou, Shadha Al Kharusi and Salim Al Harthi, Said Al Shahry & Partners (SASLO )
For these purposes: • “Person” means a natural or juristic person and includes joint ventures and non-Omani partnership agreements that do not assume the form of a company. • “Enterprise” includes: (a) an individual enterprise owned by a natural Omani person which exercises in Oman any of the specific activities speci - fied in Article 159 (bis) of the Income Tax Law. The owner of the enterprise shall be determined from the commercial or industrial registers or other fiscal records or documents. (b) Omani company that takes the form of partnership, limited partnership or limited liability company and exercises the activi - ties specified in Article 159 (bis) of the Income Tax Law. • “Establishment” means an establishment solely owned by a natural person who inde - pendently carries on a commercial, industrial or professional activity in Oman. • “Permanent establishment” means a for - eign individual or entity that carries out an economic activity either directly or indirectly through an agent where such foreign individu - al/entity resides in Oman for a period exceed - ing 90 days within any 12-month period. Special provisions apply to the taxation of income derived from the sale of petroleum. In addition, excise duties were introduced in Oman in 2019 on certain specific goods. Economic Stimulus Plan The Ministry of Finance has published an Eco - nomic Stimulus Plan (ESP) as part of its efforts to mitigate the effects of COVID-19 on the econo - my. The plan addresses the following key areas:
• taxes and fee incentives; • stimulating business and investment through, for example, the simplification of procedures and the relaxation of regulations for foreign companies; • SMEs, including a temporary reduction of income tax rates and the postponement of loan repayments until 2021; • the labour market/employment, including a reduction in fees for hiring ex-pats; and • banking – the postponement of loan instal - ments. The tax measures adopted by the ESP include: • income tax on dividends and interests has been suspended for an additional period of five years, from 2020 until 2024; • the rate of income tax for SMEs has been reduced to 12% for the tax years 2020 and 2021; • certain provisions have been introduced relat - ing to the carrying forward of losses; and • hotels were exempt from income tax for 2020 and 2021, and tourist facilities were exempt from paying the municipality and tourism taxes they collect until the end of 2021. The ESP also exempts all companies whose main activity is operating in the economic diver - sification sectors from income tax for five years. Only activities which commenced between 1 January 2021 and 31 December 2022 are eligi - ble for this exemption (subject to the rules and conditions set out by the Omani tax authority). Amendment to Income Tax Law The Income Tax Law was amended in 2020 by RD 118/2020. Key amendments include: • enabling provisions to facilitate the exchange of information between the tax jurisdictions
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