12% corporate tax in Oman

Oman has changed its corporate tax laws to woo foreign investors, in an attempt to diversify its economy beyond oil income, an official publication and analysts said yesterday.

"The new tax law has been made easy for foreign investors to allow them to retain a bigger share of their profit to encourage a bigger international participation to our economy," the official gazette said.

The new corporate tax rate is 12 per cent and applicable to all companies registered in Oman, owned by local or international firms. It will take effect from January 2010.

It replaces current corporate taxes ranging from five to 30 per cent and will apply to companies earning a minimum profit of RO30,000 (Dh286,000) a year.

"It is a fair tax – uniform and applicable to all companies. The timing of the new corporate tax is meant to attract more foreign investors," Sridhar Sridharan, partner at accountancy Ernst & Young, said.

Income from oil and gas exports make up 80 per cent of total state revenue. Oman's budget deficit will double in 2009 to an estimated RO810 million from RO400m a year earlier. "It is another sign Oman is trying to reduce deficits and depend less on oil revenues," Nabil Jawad Sultan, Director of Jawad Sultan Enterprises, said.

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