On 14 September 2020, Mr. Haitham Bin Tarik, the Sultan of Oman issued Royal Decree No. 118/2020, which amended certain provisions of the Income Tax Law (ITL). The major changes are following:
- For tax years starting on or after 1 January 2020, a single income tax return is required to be submitted within 4 months from the end of the relevant tax year or accounting period for which the income tax return is prepared.
- Replacement of the process of filing both provisional and final income tax returns with the process of filing a single income tax return within 4 months from the end of the accounting period.
- Introduced a new concept of tax residency rule: a natural person will be a resident if he or she spends 183 days or more (consecutive or intermittent) in Oman during the tax year and a legal person will be a tax resident if it has been established in accordance with the laws and Royal Decrees in force in Oman, or if its headquarters or head office is in Oman. Amendments regarding residence are effective 21 September 2020.
- Provision of additional powers to the Tax Authority to engage in automatic exchange of information and request information from licensed banks to comply with provisions of international agreements.
The amendments on annual tax compliance take effect for tax years starting on or after 1 January 2020 and the other amendments take effect from 21 September 2020.
