Oman income tax: 5% above OMR 42,000 from 1 January 2028, and the 183-day test

Oman has published a personal income tax law, and the first thing to say about it is the date. Royal Decree 56/2025, issued on 22 June 2025 and published in Official Gazette No. 1602, takes effect on 1 January 2028, so nothing under it is payable today. The law has 76 articles in 16 chapters. Its core is short: 5% on taxable income, an amount of OMR 42,000 a year set aside first, and a residence test of more than 183 days in the tax year, consecutive or not. Article 1 defines the tax year as a full Gregorian year from 1 January to 31 December, and the resident as any person whose presence in Oman passes 183 days during it. Article 6 then taxes a resident's income earned in Oman or outside it, and a non-resident's income earned in Oman. The Tax Authority says that about 99% of the population will fall outside the tax, which tells you who the law is aimed at. Two things still need care: how the threshold really works, and what remains to be decided by regulation.

How the 5% works, and why OMR 42,000 is not a band like others

The OMR 42,000 threshold applies to gross income: only the excess is net income, from which exemptions, costs and losses still come off before the 5%.

The definitions in article 1 run in a chain, and the order matters. Gross income is all cash amounts and benefits in kind you receive in the tax year. Net income is what exceeds OMR 42,000 of gross income. Taxable income is net income less the exemptions, costs and losses the law provides, and less the exemptions under international agreements. Article 8 then charges 5% on taxable income. So the threshold works as a deduction: passing it by one rial does not put your whole income in the tax.

Our illustration, ignoring any exemptions: with gross income of OMR 60,000, net income is OMR 18,000 and the tax OMR 900. With OMR 42,000 or less, there is no net income. Exemptions and deductions can only reduce those figures. The Tax Authority's announcement names education, healthcare, inheritance, zakat, donations and primary housing among them, and says the executive regulation will set the detail.

Eleven sources of income

Article 7 lists what gross income can be made of. Article 9 reads wages widely: everything you get from an employer for your work, in whatever form, including allowances, overtime, bonuses, incentives, grants, shares in profits and benefits in cash or in kind. Compensation for lost pay is treated the same way, as the Tax Authority's FAQs show with back pay awarded by a court. Benefits in kind include housing and other extras, whether they come from your employer or from someone else.

For rent, the FAQs add a warning: residential rent is taxable under this law, even though it is exempt from VAT. The 15% for self-employment and letting is a flat allowance you can replace with your actual expenses, if you hold the documents. Foreign tax on the same income can be taken into account only where that income is taxable in Oman, and the definition requires a tax of the same kind, paid to that state by the person on income from the same source.

Residents, non-residents, and the wider test

The definition is one sentence long, and that is its strength. It contains no home test, no centre of interests and no nationality rule: the FAQs say that anyone over 183 days is resident, Omani or not. A consequence follows that the law does not spell out in these terms: an Omani living abroad and spending fewer days at home does not fall within the words of this definition. Do not rely on our reading of that case, as the regulation may say more. For residents, total income covers amounts received in Oman or abroad; for non-residents, the FAQs refer to amounts received in Oman. Those whose total income passes OMR 42,000 must file a return, according to the FAQs, and we did not read a date in them.

Non-residents can also be reached at source. FAQ 20 gives the case of a non-resident consultant present for under 183 days: the government body paying the fee withholds 5%, and the 10% under article 18 bis of the old Income Tax Law no longer applies, as the decree repeals that clause. Employers will withhold and remit tax, State administrative units included. Article 3 adds that the Authority will issue a tax residence certificate on request, and article 2 keeps treaties to which Oman is party unaffected.

What is still open: the executive regulation

Article II of the decree tells the Chairman of the Tax Authority to issue the executive regulation within a year of publication in the Official Gazette, which puts the date at about 30 June 2026. On the Authority's law and regulation page, updated on 30 June 2026, we saw the decree but no regulation listed when we read it on 3 November 2026. We cannot say whether it has been issued elsewhere. Article 5 leaves it to set procedures, documents, models, necessary and incidental costs, actual expenses and the calculation and carry-forward of losses. Until it appears, day counting beyond the wording of article 1, and many of the practical steps, remain unsettled on what we read.

Why count now for a law of 2028

The test is annual, so nothing done in 2026 or 2027 makes you resident for 2028. But contracts, housing arrangements and moves planned today will run into it, and a calendar-year window has a known quirk: a stay from October to March splits across two years, and each may stay under the line, while the same days in one year would pass it. The sample stays above add up to 188 days in 2028.

The law read here is the Arabic text in the Official Gazette, as published on the Tax Authority's portal. We read articles 1 to 14 directly, and did not go through all 76, including the 16 exempt categories that others report under article 25. Translations of terms are ours. Compare the UAE and Saudi Arabia, or use the country table. Your former country keeps its own test, as dual tax residency explains. The Taxlag app can keep this count once the first tax year begins.