Oman Confirms 5% Personal Income Tax on High-Earners Starting 2028

Oman will begin implementing a 5% personal income tax on high-income individuals starting January 2028, making it the first country in the Gulf Cooperation Council (GCC) to introduce such a tax.

The law will apply to all residents, both Omani citizens and expatriates, who earn more than 42,000 Omani riyals per year (approximately AED 400,000).

Authorities say this move is part of a broader financial reform strategy to diversify Oman’s income sources and reduce its reliance on oil revenue, in line with Vision 2040.

“Approximately 99% of the population will remain outside the scope of this tax,” Omani officials confirmed.

Exemptions and Deductions to Offset Household Impact

The new tax law includes built-in exemptions and allowable deductions to accommodate key social and personal needs:

• No tax on income below 42,000 OMR annually
• Deductions permitted for education, healthcare, housing, zakat, charitable donations, and inheritance
• Applicable equally to Omanis and foreign residents

The reform marks a turning point in the region’s fiscal approach. While the 5% rate is modest, it sets a precedent as the GCC’s first formal step into personal income taxation.

The new law will officially come into effect at the start of 2028.