On 9 March 2021, the government of Oman declared an economic stimulus plan in response to the Covid-19 pandemic. The stimulus plan contains several tax incentives as follows:
- A 5-year income tax exemption for new businesses having main activities in the identified economic diversification sectors, beginning from the date of registration in the Commercial Registry during the period 1 January 2021 to 31 December 2022;
- Income tax exemption for hotel sectors for tax years 2020 and 2021;
- Income tax reduction from 15% to 12% for SMEs registered during tax years 2020 and 2021;
- 50% reduction in environmental licenses fees for renewals in 2021;
- Exemption from municipality tax and tourism tax of tourist business until the end of 2021;
- A reduction in the rental value of lands by 25% until the end of 2022 in the industrial zones of the Public Establishment for Industrial Estates and Special Economic Zone of Duqm;
- Losses incurred in the tax year 2020 are allowed to be carried forward for an indefinite period;
- Installment-based tax payments without the imposition of the 1% additional tax levy during the year 2021;
- A deduction equal to 1% of the tax due for 2021, subject to an OMR 10,000 cap, is provided for taxpayers that fulfill their tax obligations by the prescribed due dates; and
- The suspension of withholding tax (WHT) on Omani-source interest and dividends paid to non-residents is extended through tax year 2024.
