A double taxation treaty between Germany and Oman was signed in Muscat on 15 August 2012. This follows the conclusion of a bilateral investment promotion and protection treaty which was signed in 2010.
The double taxation treaty generally follows the provisions of the OECD Model; however a construction, assembly or installation project is regarded as a permanent establishment if it continues for at least nine months.
The maximum withholding tax rate applicable to dividends under the treaty is 10%, reduced to 5% where the recipient company is the beneficial owner of 10% of the capital of the company paying the dividends. If the recipient is a real estate investment company that is exempt from tax on all or part of its profits, or that can deduct the dividend from its profits, the maximum withholding tax is 15%.
There is no withholding tax on interest provided that the recipient is the beneficial owner and is subject to tax on the interest in the other contracting state. A maximum withholding tax of 8% applies to royalties under the treaty.
The double tax treaty is likely to enter into force later in 2013 after ratification procedures have been complete.
