OMAN CHAMBER OF COMMERCE AND INDUSTRY …

1 oman CHAMBER OF COMMERCE AND INDUSTRYTHE LAW OF INCOME TAX ON of Income Tax on Companies3 6121/1975 Exempting Wholly Omani Owned CompaniesfromTax for 5 Years6265/1977 Reducing Income Tax on Mixed Companies6380/1993 Cancelling Tax Exemption Established forCommercialand Industrial Companies Wholly Owned byOmanis6446/1987 Amending Income Tax on Mixed Companies6577/1989 Law of Profit Tax on Commercial andIndustrialEstablishments6787/1996 Amending Certain Provisions of the RoyalDecreeNo. 47/198171 Ministerial Decision No. 91/198473 Ministerial Decision No. 92/198475 Ministerial Decision No. 43/198676 Ministerial Decision No. 23/198977 Royal Decree No. 47/1981 Concerning the Law of Income Tax on CompaniesWe, Qaboos Bin Said, Sultan of oman ,Having perused Royal Decree No. 26 of 1975 issuing the Law settingup the Administrative Apparatus of the State and the amendmentsthereto,The Income Tax Decree of 1971,Royal Decree No. 21 of 1975 and the amendments thereto,Royal Decree No.

2 65 of 1977,The Law of Commercial Companies No. 4 of 1974,And Royal Decree No. 61/1980 continuing the exemption prescribedby virtue of Article (2) of Royal Decree No. 21/1975,And in accordance with the exigencies of the public good,We, decree as follows:Article 1 The provision of the attached Law and its four schedules entitled TheLaw of Income Tax on Companies shall have 2 This Decree shall be published in the official Gazette and shall haveeffect from the date of Bin Said Sultan of OmanIssued on: 14th Rajab 1401 Which corresponds to 18th May 1981 THE LAW OF INCOME TAX ON COMPANIESCHAPTER ONEINTRODUCTIONThe Law and the date from which it has effect:Article 11. This Law shall be called the Law of Income Tax on Companies This Law shall have effect in all parts of the Sultanate of Without prejudice to the provisions of Paragraph (3) of the FourthSchedule to this Law shall have effect as from 1st January 1981, andshall apply to income chargeable to Tax for the Tax Year ending on31st December 1980, and the following Tax :Article 21.

3 The Sultan shall mean His Majesty the Sultan of oman and Accounting Period shall in relation to any Company mean theperiod for which that Company s accounts are Business shall include any profession, trade, INDUSTRY or anyinterest of a professional trading or industrial nature or whichprovides any The Company shall mean a partnership, limited partnership,Joint-stock Company, Limited Liability Company as provided inthe Law of Commercial Companies of 1974 but nevertheless andnotwithstanding the contents of Article (3) of that Law it shallinclude joint ventures as defined in that Law and anyestablishment of a permanent nature in oman which is supportedby a foreign foundation or which the Secretary General deems tobe supported by a foreign Secretary General shall mean the Secretary General of The Government shall mean the Government of His Majesty theSultan of (bis) The Secretariat General shall mean the Secretariat Generalof Taxation at the Ministry of Finance as stipulated in Article[(4)(bis)] of the Gross Income shall mean income chargeable to Tax by virtue ofthis Law and which has not been ascertained in accordance withChapter Loss shall mean a loss computed in the same way profits orrevenues are The Minister shall mean the Minister of finance or any personwielding this oman shall mean the Sultanate of Permanent Establishment shall mean the fixed place of businessin which an undertaking carried on all or part of its business andthe expression Permanent Establishment shall include thefollowing in particular:(A) A place of sale(B) A place of management(C) Branches(D) Offices(E) Factories(F) Workshops(G) Mines, quarries or any place for natural materials(H) A building site, place of construction or assembly plant, butthe expression Permanent Establishment shall not include the following.

4 (a) the mere use of facilities for the purpose of storage, displayor delivery of goods or products pertaining to the Company; (b) the preservation in a store of products or goods pertainingto the Company alone for the purposes of storage, display ordelivery; (c) the preservation in a store of products or goods pertainingto the Company for the purposes of their manufacturer alone bymeans of another establishment; (d) storage in a fixed place for a business which does not by itsnature intend to make a profit in order to collect information for a scientific study or similar undertaking of a nature which is preparatory or supplementary to the purpose of Person shall include natural and juristic Petroleum shall mean any crude oil, natural gas, asphalt orpetroleum derivatives or Prescribed shall mean prescribed by virtue of the provisions ofthis The Director or Officer Responsible shall mean when used inrelation to any Company, a member of the Board of Directors, anOfficer, Manager or any person representing the Company ormanaging its affairs.

5 Or any other person who has a connectionwith the Company and has received a notification from theSecretary General of his intention that he should deal with him asthe Officer Responsible for such The Repealed Legislation shall mean the Income Tax Decree of1971 and all the amendments Tax shall mean any tax which must be paid by virtue of this Lawand shall include any fine, interest or any other burden stipulatedby virtue of this Law with the exception of any penalty stipulated inChapter The Tax Committee shall men the Income Tax Committee atthe Ministry of Finance, stipulated in Article 4 of the Income Chargeable to Tax shall mean the gross sum of revenuesless allowable The Tax Year shall mean the period of twelve monthscommencing from the 1st day of January and ending on the 31stDecember TWOMANAGEMENTA rticle 31. The Secretary General shall be responsible for implementing thisLaw and for the Secretariat General to exercise its jurisdiction andfunctions.

6 He shall be responsible also for control and supervisionon Directors General, Directors and other employees of theSecretariat General for the purpose of implementing this The Secretary General may authorize Directors General, Directorsor other employees of the Secretariat General to assume any of hisfunctions specified in this Law, or to carry out specific assignmentsentrusted originally to the Secretary General in accordance withthis Every officer appointed in order to carry out the prescriptions ofthis Law shall implement it and ensure complete compliance withthe prescriptions of its articles, and that the enquiries necessarywith regard thereto proceed and this shall be within the limits ofthe powers delegated to him by virtue of Paragraph CommitteeArticle 41. The Committee shall be formed from three employees from theMinistry of Finance, other than the President. Appointment of thePresident and members shall be by a decision from the Ministerand more than one Committee may be The committee shall be empowered to view the appeals against theSecretary General s decisions in implementing the provision ofArticle 46 of this Law, in addition to other functions as stipulatedin this Committee operation system shall be issued by a decision from theMinister and Committee sessions shall be The Committee shall have a technical expert and a GeneralArticle 4 (bis)1.

7 The principal jurisdiction of the Secretariat General shall be to: One) Take necessary procedures for tax assessment or exemption asspecified by the Law; Two) Take necessary procedures to collect taxes by implementing theprocedures stipulated in the Law to collect taxes, duties and otheramounts due to the administrative units of the Government,without prejudice to any provisions or special proceduresstipulated in this Law; Three) Assume any other functions specified by a Ministerial Department of Investigation & Assessment, Directorate General ofCollection and Directorate General of Tax Survey &Administration, listed in the organizational structure of theMinistry of Finance, shall be under the Secretariat 51. Every employee who, through his job, function or jurisdiction mayhave an affair in implementing this Law or settling its relateddispute is bound to observe the confidentiality of the trade inrespect of documents, instruments and data related to anyCompany, also all the confidential instructions related to theimplementation of this Law, which may be in his possession orcame to his knowledge while performing his The following shall not be deemed to be breaches ofconfidentiality: One) The giving of confidential statements demanded in the CriminalCourts or in the courts connected with this Law or; Two) Any confidential details given to any person who is attemptingto implement or interpret this Law when the provision of suchinformation to him shall be necessary for such 61.

8 The Secretary General may from time to time prescribe the formfor any notification or declaration of income, or any otherdocuments required for the purpose of this Law, and when suchprescription has been made any notification or declaration or anyother document must be in accordance with such prescribed The notifications which the Secretary General issues in accordancewith this Law may be signed by any responsible officer having thepowers entrusted to him by virtue of paragraph 2 of Article (3) andany notification by a person asserting that he signs by the order ofthe Secretary General shall be deemed unless the contrary isproved to be signed by an Officer so Any form or notification or document issued or published ordelivered by the Secretary General in accordance with this Lawshall be considered an official document if it carries the name ordescription of the Secretary General or the responsible officer whois designated by virtue of paragraph 2 of Article (3) and this shallbe whether the name or description is printed, stamped or 71.

9 If this Law requires that any notification or document issuing fromthe Secretary General to any Company or officer responsible in theCompany should be written or that the notification or documentshould be delivered to the Company or the officer responsible in it,then the announcement of such notification regarding suchCompany or such officer responsible in it shall specify that theannouncement should be made to the officer responsible in suchCompany in the following manner: One) delivery to him in person; Two) sending it by registered post to his ordinary address or his lastknown address or to any post office box hired in the name of suchperson or Company or to the fixed address in the last documentissuing from the Company or from the person representing it tothe Secretariat If the officer responsible refuses to accept the notification ordocument directed to him, the notification or document shall beconsidered as though it had been delivered to THREEINCOME CHARGEABLE TO TAXA rticle 8(I)In Accordance with this Law, Tax shall be charged for every Tax yearon the taxable income of any Company which has been realized or hasarisen in oman or which the Secretary General presumes to havebeen realized or to have arisen in this way in relations to thefollowing:1.

10 Profits or gains of:(a) any business; (b) any right granted to any individual to benefit from or utilizeany land;2. Interest and Royalties3. (bis) Rents of plant, Machinery and (bis) (1) Management fees, amounts collected against technical expertise transfer or research and Any monies considered as income under this Any income from any other 9In the application of this Law:1. Any sum which has been obtained in any Tax year by virtue of anycontract of insurance against failure to realize profits ascompensation for damages or failure to realize profits shall bedeemed to be gross income for that Tax If when the income of an establishment is determined for any Taxyear it should transpire that any expenditure has been deductedany loss has been written off, any bad debt has been allowed to bewritten off or a deduction corresponding to any liability has beensettled and subsequently all or part of these deductions or baddebts have been recovered in a subsequent tax year or theliabilities have been assigned in whole or in part then any sumwhich is recovered and any liability which is discharged shall bedeemed to be gross income in the tax year during which such sumis Any sum which any Company obtains in any tax year after closingits business and which could have been included in gross incomeaccording to the provisions of this Law had it been received beforethe Company ceased to trade shall be deemed to be gross incomefor such tax If the Government in reliance on an agreement between it and anyCompany has the right to receive any royalties either in cash or inkind and the Government chooses to receive the royalties in kindthen there shall thereupon and for the purposes of determining theincome chargeable to tax of that