Oman income tax 2028: who pays, the rules, and what it means for homeowners
Updated
Is there income tax in Oman?
Not yet for individuals: Oman's personal income tax starts on 1 January 2028 under Royal Decree 56/2025. From then a tax resident — in Oman for more than 183 days in the year — pays 5% only on the part of total yearly income above OMR 42,000, so OMR 60,000 a year means OMR 900 of tax before reliefs and OMR 42,000 or less means no tax and no return. Non-residents are taxed only on their income from Oman.
| Total yearly income | Taxed part | Tax a year | Share of income |
|---|---|---|---|
| OMR 30,000 | OMR 0 | OMR 0 | 0.00% |
| OMR 42,000 | OMR 0 | OMR 0 | 0.00% |
| OMR 50,000 | OMR 8,000 | OMR 400 | 0.80% |
| OMR 60,000 | OMR 18,000 | OMR 900 | 1.50% |
| OMR 100,000 | OMR 58,000 | OMR 2,900 | 2.90% |
| OMR 200,000 | OMR 158,000 | OMR 7,900 | 3.95% |
Official rule: Personal income tax: 5% on the part of a resident's total yearly income above OMR 42,000. (source, checked 2026-10-19)
Not a valid document. Estimate for information only — not financial advice, not an offer of credit and not a bank document. Errors are possible. Only your bank's or finance company's official offer letter, contract and statements are binding.
Oman's personal income tax law (Royal Decree 56/2025) starts on 1 January 2028. For most homeowners it changes nothing; for higher earners and landlords it can. Information only: the law's executive regulations have not yet been published, so the details below can still change.
From 2028, residents pay 5% on the part of their total yearly income above OMR 42,000; with less, there is no tax and no return to file. Residential rent you receive counts as income. Interest on a loan to build or buy your main home will be deductible, once in a lifetime, under rules still to be set. VAT is a different tax: residential rent and the resale of a home are exempt from it.
Who pays: residents and non-residents
- Tax resident: You are an Oman tax resident if you are in Oman for more than 183 days in a tax year, in one stretch or several, Omani or not.
- What is taxed: Residents are taxed on their income from Oman and abroad; non-residents only on their income from Oman.
- Tax year: The tax year is the calendar year, 1 January to 31 December.
What counts as income
Income from 11 sources is added together: salaries and wages; self-employment (outside a commercial registration); rent; royalties; interest; dividends and gains on shares and sukuk; gains on selling property; pensions and end-of-service benefits; prizes; grants and gifts; board and committee membership fees. The OMR 42,000 is measured on that total, not per source. On rent and self-employment income you deduct either a flat 15% for costs or your actual documented costs, and you may switch between the two only every 3 years.
What is exempt
- Your home: Gains on selling your main home are exempt if you sell at least 2 years after telling the Tax Authority it is your main home; gains on a secondary home are exempt once in a lifetime.
- Family: Inheritances, bequests, grants and gifts between spouses or first-degree relatives are exempt.
- Moving to Oman: When you become an Oman tax resident, your income from outside Oman is exempt for the first 18 months, once.
What you can deduct
- Education and healthcare: Education and healthcare costs for you, your spouse, your parents and children, and siblings or foster family members you support, are deductible under conditions still to be set in the executive regulations; the law sets no cap.
- Zakat and donations: Zakat and donations to bodies named by the Tax Authority are deductible up to 5% of your total income.
- Pension contributions: Your own contributions to pension and end-of-service schemes, compulsory or voluntary, are deductible for at most two schemes.
- Home-loan interest: From 2028, interest (or Islamic financing cost) on a loan to build or buy your main home is deductible once in a lifetime, under rules to be set in the executive regulations (PIT Law Art. 25(15)).
- Tax paid abroad: Tax paid abroad on income that is taxable in Oman can be deducted from the Omani tax, but not beyond it and with no carry-forward.
Filing and paying
- Return and payment: If your total income is above OMR 42,000 you file an online return within 6 months of the end of the tax year and pay the tax by the same date; if your only income is a salary, membership fees or a pension from one employer, the employer can file for you on request. For 2028 that is six months after 31 December 2028 (our reading of the law's "6 months").
- Salaries: Employers in every sector — government, private and foreign companies — will deduct the tax from salaries above OMR 42,000 a year and pay it to the Tax Authority. How and how often is still to be set in the executive regulations.
- Late payment: Paying late costs an extra 1% a month on the unpaid tax; the Tax Authority's chairman may waive it wholly or partly under the executive regulations still to be issued.
Still open
The executive regulations, which set several of the conditions (deductions, withholding), were not yet published when we checked on 20 October 2026: the Tax Authority's law-and-regulations page listed only Royal Decree 56/2025. The law asked for them within a year of its 30 June 2025 publication. Until they appear, the caps on the deductions, the conditions for the home-loan interest and the withholding mechanics are not known.
The rules we could read
- Start: Personal income tax (Royal Decree 56/2025) starts on 1 January 2028.
- Rate and threshold: Personal income tax: 5% on the part of a resident's total yearly income above OMR 42,000. Only income above OMR 42,000 a year is taxed; residents with less file no return.
- Rent: Residential rent counts as income for the personal income tax (unlike VAT); costs are deemed 15% of the rent unless actual costs are claimed.
- Home-loan interest: From 2028, interest (or Islamic financing cost) on a loan to build or buy your main home is deductible once in a lifetime, under rules to be set in the executive regulations (PIT Law Art. 25(15)).
Illustration: a landlord with OMR 45,000 a year
An illustration, not a tax calculation: suppose a resident's total yearly income from 2028 — salary plus rent, after the costs the law deems or allows on the rent — is OMR 45,000 (our assumption).
- Income above the OMR 42,000 threshold: OMR 45,000 − OMR 42,000 = OMR 3,000.
- Tax at 5% on that part only: 5% × OMR 3,000 = OMR 150.000 a year.
- The first OMR 42,000 is not taxed at all; with total income of OMR 42,000 or less there is no tax.
How the deemed costs, the home-loan interest deduction and other items are applied in practice depends on the executive regulations, which have not yet been published — check with the Tax Authority before you rely on any figure.
Your home loan
The deduction is for interest (or the Islamic financing cost) on a loan to build or buy your main home, once in a lifetime. The law leaves the conditions to the executive regulations, so how much you could deduct, and from when, is not known yet. Your instalment and interest: housing loan calculator · the housing loan limits: Oman housing loan rules.
Letting a home
Rent from a home you let counts towards the OMR 42,000 threshold. Below it, the rent does not create a tax bill; above it, only the part of your total income over the threshold is taxed at 5%. Gross and net yield: rental yield and ROI.
VAT is separate
Exempt from VAT: resale of residential property, rental of property for residential purposes and bare land (VAT Law Art. 47, on conditions set by the regulations). Commercial property is not exempt. VAT itself is 5% on most other goods and services. The VAT law text we read does not say how the first sale of a new home is treated.
Information only, not tax advice. Sources: the Tax Authority's personal income tax FAQ and Royal Decree 56/2025 (Arabic text, our translation); the executive regulations were not yet published when we checked.
Questions people ask
When does personal income tax start in Oman?
In Oman, on 1 January 2028, under Royal Decree 56/2025.
Is rent from a home I let taxed?
Yes — in Oman, residential rent counts as income for the personal income tax, unlike VAT; the law deems part of the rent to be costs unless actual costs are claimed.
Can I deduct the interest on my home loan?
In Oman, interest (or the Islamic financing cost) on a loan to build or buy your main home will be deductible once in a lifetime, under rules to be set in the executive regulations, which have not yet been published.
Is there VAT on rent or on buying a home?
In Oman, rental for residential purposes, the resale of residential property and bare land are exempt from VAT, on conditions set by the VAT regulations. Commercial property is not exempt.
What is the income tax rate in Oman?
5%, from 1 January 2028, and only on the part of total yearly income above OMR 42,000. There is one rate — no bands. Until then individuals pay no personal income tax in Oman.
How much tax is deducted from salary in Oman?
No tax is deducted from salaries in Oman before 2028. From then employers deduct the tax only where salaries exceed OMR 42,000 a year — 5% of the part above it, so OMR 5,000 a month (OMR 60,000 a year) means OMR 900 a year before reliefs. How and how often employers deduct is left to the executive regulations, not yet published.
What are the new income tax rules in Oman?
Royal Decree 56/2025: from 1 January 2028, 5% on total yearly income above OMR 42,000 for anyone in Oman more than 183 days a year (on worldwide income), and on Omani income for non-residents. Salaries, rent, interest, dividends, property gains and pensions all count; gains on a registered main home, and inheritances, bequests, grants and gifts between spouses or first-degree relatives, are exempt; education, healthcare, zakat (up to 5%) and main-home loan interest (once) can be deducted. Returns are due 6 months after the year ends.