Oman: local rules

Oman has no separate transfer pricing law. The rules sit in the Income Tax Law (Royal Decree 28/2009, as amended). Article 125 says the related person rules apply when a taxpayer deals directly or indirectly with a related person. Two persons are related if one controls the other, if a third person controls both (Articles 132 and 133), or if one is a relative of the other up to the third degree. Article 126 is the arm's length test: if the agreed terms give the taxpayer a lower taxable income, or a bigger loss, than independent persons would have, the Tax Authority ignores those terms and uses the terms independent persons would have agreed. Article 127 lets the authority make a matching adjustment for the other party, but only if that party asks in writing within 12 months of the first assessment (Article 128). The rule works only one way, against a result that lowers tax.

No master file, local file or transfer pricing form was found in the law or the Executive Regulation, and there are no documentation thresholds. Every taxpayer must keep its books and the papers that support them for at least ten years from the end of the accounting period (Article 15), and the authority can ask for them and fine a refusal (Article 181). In practice a taxpayer should keep a file that shows why related party prices are at arm's length, because the authority can recompute them. Claims online of a 'Ministerial Decision 164/2023' with OMR 250,000 or 500,000 thresholds were not found in any official text.

Neither the law nor the Executive Regulation lists transfer pricing methods or ranks them. Article 126 only asks what independent persons would have agreed. Advisers say the Tax Authority looks to the OECD Guidelines and the usual OECD methods, but no official page says so. No advance pricing agreement programme was found. Mutual agreement requests go through Oman's tax treaties.

There is no special transfer pricing penalty, so the general penalties apply. A late return costs a fine of OMR 100 to OMR 2,000 (Article 179). A return that understates income can cost 1% to 25% of the extra tax (Article 180), which is how a transfer pricing adjustment is usually penalised. Tax paid late carries an additional 1% a month (Article 156). Failing to give information or records when asked costs OMR 200 to OMR 5,000 (Article 181), and breaking a rule in the Executive Regulation costs up to OMR 3,000 (Article 187 bis 1).

Royal Decree 70/2024 issued the Supplementary (Top-up) Tax Law on 31 December 2024. It was published in Official Gazette 1578 on 5 January 2025 and applies from 1 January 2025. It covers entities of groups with revenue of at least EUR 750m (in OMR) in at least two of the four preceding years, and tops up the tax to 15% (Article 4). Article 5 makes three kinds of entity pay it: any group entity located in Oman (a domestic top-up tax), an Omani ultimate parent with a low-taxed group entity abroad, and an Omani intermediate parent with one (an income inclusion rule). The law sets no return, payment or registration date. Those are left to an Executive Regulation from the Tax Authority Chairman. A draft was put out for consultation from 11 to 18 March 2026, but the final Regulation was still not issued by mid-2026. KPMG reported in May 2026 that the OECD gave Oman's domestic top-up tax and its safe harbour transitional qualified status.

The income tax return is due within four months of the end of the tax year (Article 140 as replaced by Royal Decree 118/2020, for years from 1 January 2020), and the tax is due on the same date (Article 150). Qualifying small enterprises taxed at 3% file within three months (Article 159 bis 18). The standard rate is 15%. Country-by-country reporting is set by Tax Authority Decision 79/2020 for groups with consolidated revenue of at least OMR 300m. Each Omani entity of such a group notifies the Tax Authority by the last day of the group's reporting year. An Omani ultimate parent, or an Omani surrogate parent, files the report within 12 months of year end. Local filing was suspended on 7 July 2021 for groups whose parent is outside Oman. Article 189 of the Income Tax Law moves a time limit that ends on an official holiday to the first working day after it. It does not mention the Friday and Saturday weekend, so a date on a weekend is shown as it falls.