Oman's Tax Authority has introduced new conditions for deducting certain business expenses under the Executive Regulations of the Income Tax Law, clarifying that the changes apply only to corporate taxpayers and will take effect for tax years beginning on or after 1 January 2027.
The Oman Tax Authority (OTA) has introduced new rules on when certain business expenses can be deducted under the Executive Regulations of the Income Tax Law.
The changes were made through Decision No. 180/2026, which inserts a new Article 18 bis into the Executive Regulations of the Income Tax Law for Companies and Institutions.
Under Article 18 bis, a taxpayer may deduct qualifying expenses only if all of the following conditions are met:
- The expenses are incurred for the purpose of carrying out the commercial activity
- The deduction is exclusively authorised by the Chairman of the Tax Authority
- The expenses do not arise from a breach of any obligation, regardless of its source.
After the decision prompted discussion on social media, the Tax Authority issued a clarification on 27 July 2026 explaining the scope of the amendment.
The authority said Decision No. 180/2026 applies only to the Corporate Income Tax Law issued by Royal Decree No. 28/2009 and does not affect the Personal Income Tax Law.
It also clarified that the amendment applies to taxpayers, including establishments, enterprises, Omani companies and permanent establishments, that incur additional costs while complying with decisions issued by units of the State’s Administrative Apparatus and other public legal entities in the course of their business activities. Such expenses may be deductible provided they do not result from a breach of any obligation by the taxpayer, regardless of its source.
According to the Tax Authority, the amendment is intended to prevent taxpayers from bearing additional tax burdens arising from compliance with applicable laws and regulations, while supporting the national economy and upholding the principle of tax fairness.
The new rules will apply to tax years beginning on or after 1 January 2027.
