Oman Tax Treaty updates​

In brief

Oman has officially ratified two landmark Double Taxation Avoidance Agreements (DTAAs)with Bahrain and Kazakhstan, reinforcing its commitment to international tax cooperation andalignment with OECD and UN Model Tax Convention standards. These treaties aim toeliminate double taxation, prevent fiscal evasion, and foster cross-border investment andeconomic integration.

Oman - Kazakhstan DTAA

• Ratified by Oman: 4 September 2025 via Royal Decree No. 66/2025 ​

• Yet to be ratified by Kazakhstan​

• Effective Date: 1 January of the calendar year following the exchange of ratificationnotifications

Oman - Bahrain DTAA ​

• Ratified by Oman: 2 September 2025 via Royal Decree No. 62/2025​

• Ratified by Bahrain:  23 June 2025​

• Effective Date: 1 January of the calendar year following the exchange of ratificationnotifications

Summary of the relevant withholding tax (WHT) rates

In detail

Persons Covered (Article 1)​​

Both treaties apply to individuals and entities resident in either contracting stateincluding:​​

• Legal persons, partnerships, and pension funds​​

• Public law entities and institutions of public interest​​

Taxes Covered (Article 2)​​

• Oman: Income tax​​

• Kazakhstan: Corporate income tax, individual income tax, property tax​​

• Bahrain: Corporate income tax​​

Permanent Establishment (PE) (Article 5)​​

Kazakhstan Treaty: ​

• General PE: The definition of a PE under the DTAA is similar to the OECD Model TaxConvention, including a dependent agency PE​

• Service PE: The furnishing of services, including consultancy services, by an enterprisethrough employees or other personnel engaged by the enterprise (or through a relatedparty), if such activities continue (for the same or a connected project) for more than 6months within any 12-month period​

• Construction/Assembly Projects: A building site, construction, assembly or installationproject, or any supervisory activity in connection with such site or project, if it lasts morethan 6 months within any 12-month period​

• Exploration/Exploitation of Natural Resources:​
  A mine, a pit, an oil or gas well, a quarry, an installation, a structure (including drilling rig or ship), or any other place of exploration or extraction of natural resources, as well as supervisory services connected therewith.​

Permanent Establishment (PE) (Article 5)​

Bahrain Treaty: ​

• General PE: The definition of a PE under the DTAA is similar to the OECD Model TaxConvention, including a dependent agent PE.​

• Service PE: The furnishing of services, including consultancy services, by an enterprisethrough employees or other personnel in the other state constitutes a PE only if suchactivities continue (for the same or a connected project) for more than 183 days withinany 12-month period.​

• Construction/Assembly Projects: A building site, construction, assembly project, orsupervisory activities in connection therewith constitute a PE only if the site, project, oractivities last more than 183 days within any 12-month period​

• Exploration/Exploitation of Natural Resources:​
  Activities in connection with the exploration for, or exploitation of, natural resources in the other state constitute a PE if they last more than 30 days in any 12-month period.​

Business Profits (Article 7)

The DTAAs stipulate that profits of a company are not subject to tax in the other contractingstate unless the company carries on its business through a PE in that state. Items of incomenot specifically dealt with in the DTAAs are taxable only in the contracting state where therecipient is resident. Income from services not delivered through a PE in the othercontracting state should be exempt from withholding tax and other forms of taxation in thatstate. The DTAAs provides guidance on attributing profits to a PE.​

International Shipping and Air Transport (Article 8)​​

Profits derived by an enterprise in a contracting state from the operation of ships andaircraft in international traffic are only taxable in that contracting state.​

Other tax updates​

The Tax Authority has launched digital services of tax refunds for Embassies and Diplomatsvia the Tax Authority's portal. Excise and VAT tax refunds for embassies and diplomaticmissions will now be fully digital.​

Key takeaways​

The ratification of the DTAAs with Bahrain and Kazakhstan marks a pivotal advancement inOman’s international tax diplomacy. These agreements not only align with global standardsset by the OECD and UN but also reflect Oman’s strategic intent to foster transparent,equitable, and investment-friendly cross-border relations.

By streamlining withholding tax structures and embedding robust anti-abuse provisions,Oman is signaling its readiness to engage with the global economy on sophisticated terms.This is more than a policy update - it’s a statement of vision, resilience, and global ambition.