The Tax Authority has announced the regulations and terms for income tax exemption for all businesses operating in the following the high directives of His Majesty Sultan Haitham bin Tariq Al Said, Sultan of Oman, on the Economic Stimulus Plan approved by the Honorable Council of Ministers on 9 March 2021.
PRIMARY SECTORS OF ECONOMIC DIVERSIFICATION
1. Industry: Based on the Gulf Cooperation Council’s Unified Industrial Regulations system
2. Tourism: Hotels and tourist villages are in operation.
3. Logistics Sector: The Ministry of Transportation’s suggested strategic logistics
4. Fisheries: Fishing, manufacturing, cultivation, and husbandry
5. Agriculture: Farm production, product processing, and animal husbandry
6. Mining : According to the Mining Act.
CONTROLS AND REQUIREMENTS:
First: for five years, income earned by businesses engaged in one of the sectors of economic diversification is exempt from income tax.
Only businesses that began operations between January 1, 2021, and December 31, 2022, are eligible for the exemption. From the time operations or production begin, the exemption is in effect.
Second: the income generated by the companies should be exempted if the following is achieved:
★ The company should be established in Oman.
★ The company must be registered with the Ministry of Commerce, Industry, and Investment Promotion or another relevant entity. Oman should be the main management center.
★ The company must be authorized to engage in the activity and registered under applicable laws and regulations. During the exemption period.
Third: the exemption is limited to the income generated by a company which focuses primarily on one of the aforementioned economic diversification sectors.
If a company is subject to multiple tax exemption laws and regulations, no company may have more than one tax exemption.
Fourth: the exemption is implemented using the following steps:
➔ The legal representative of the company must submit the request for exemption to the Tax authority.
➔ The request must be made by the form by the end of the following ﬁnancial year.
➔ To ensure that the exemption conditions are available, the tax authorities examine the request and its annexures.
➔ The chairman of the Tax Authority will issue the exemptions.
Fifth: the tax-exempt company must file income tax returns following the provisions of the Income Tax Law Act. The Tax Authority is required to establish a link to calculate the amount of taxable income or loss.
Sixth: if the company fails to file its return for that tax year, the Tax Authority will revoke the exemption.
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