Oman income tax for expats is changing. Oman has no personal income tax on salaries today, but its Personal Income Tax Law, issued by Royal Decree 56/2025 and published in the Official Gazette on 30 June 2025, introduces a 5% tax on individuals from 1 January 2028. Tax residents, broadly people in Oman for more than 183 days in a calendar year, will be taxed on worldwide income, but only on the part of their gross income above OMR 42,000 a year, after exemptions, costs and losses. For British expats living in Oman, or thinking of moving there, the change affects how salaries, end of service gratuities, UK pensions, UK rental income and investment gains could be taxed from 2028, and how the UK and Oman double taxation convention applies. This guide explains who will be taxed, what counts as income, the main exemptions, filing and departure rules, and the UK points to plan around now. It is general information, not personal tax advice. Oman figures are taken from the law as published, the executive regulations that will fill in many practical details were due by the end of June 2026 but we had not been able to confirm their publication when we last checked, UK rules and figures are stated as at the review date and for the 2026 to 2027 tax year unless another date is given, the information was reviewed on 5 November 2026, and all rules and figures should be rechecked before you rely on them.
Oman currently has no personal income tax on employment income. The Personal Income Tax Law was issued by Royal Decree 56/2025 on 22 June 2025, published in the Official Gazette on 30 June 2025, and takes effect on 1 January 2028. The decree requires the Chairman of the Oman Tax Authority to issue executive regulations within a year of publication, so by the end of June 2026, and those regulations are expected to set out allowable costs, limits on some exemptions, withholding procedures and filing forms. Despite that deadline, we had not been able to confirm their publication when this guide was last reviewed, so details below that depend on them should be treated as provisional. The tax year is the calendar year, from 1 January to 31 December, so the first year taxed will be 2028, with the first annual returns due by 30 June 2029. Oman's existing corporate income tax and its VAT are separate regimes and are not covered here.
The law defines a tax resident as a person whose stay in Oman exceeds 183 days, continuous or intermittent, during the tax year. Anyone who does not meet that test is a non-resident for that year. The test applies to Omani and foreign nationals alike, and the law as published does not contain the home, family or ties tests found in many other countries, although the executive regulations may add detail on how days are counted. Residence is decided for each calendar year and the law as published contains no split year rule, so on our reading someone who arrives part way through a year and stays more than 183 days in it would be resident for that whole year, although the executive regulations could address this. Residence for treaty purposes is a separate question. If you are also resident in the UK under the UK Statutory Residence Test, the tie breaker in Article 4 of the UK and Oman double taxation convention looks in turn at where you have a permanent home, your centre of vital interests, your habitual abode and your nationality. UK residence is decided by UK rules, as our guide to the Statutory Residence Test and split year treatment explains.
Tax residents will be taxed on income arising in Oman and abroad, and non-residents only on income arising in Oman. The calculation starts with gross income, defined as all cash amounts and benefits in kind received in the tax year from the sources listed in the law. Net income is the part of gross income above OMR 42,000. Exemptions, allowable costs and losses are then deducted to reach taxable income, which is taxed at a flat 5%. On the figures in the law, someone with gross income of OMR 60,000 and no exemptions or costs would have net income of OMR 18,000 and tax of OMR 900. Because the threshold is tested against gross income from all sources, a resident whose Omani salary is below OMR 42,000 could still be within the tax once UK rent, pensions, dividends or gains are added. Anyone with gross income above OMR 42,000 must file an annual return. The rate and threshold are set in the law and should be rechecked each year.
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The law lists eleven sources of gross income: salaries and wages, including allowances and bonuses; self employment; rent; royalties; interest; dividends and profits from shares, stocks and sukuk, and gains on disposing of them; gains on disposing of real estate; pensions and end of service gratuities; prizes; grants and gifts; and remuneration for board membership. For many expats the most significant points are that end of service gratuities and pensions are listed as income, and that for tax residents the list applies to income arising outside Oman too, such as UK rental income, UK and other pensions, dividends, interest and investment gains. A gratuity or pension received in 2028 or later would count towards gross income for the year it is received, subject to the exemptions and any treaty relief. Employers will be required to withhold tax from salaries, wages, pensions, end of service gratuities and board fees and pay it to the Tax Authority, and other payers in Oman will withhold on some other income. Foreign currency income is converted into rials, at the rate set out in the law and regulations.
Article 25 of the law lists sixteen exemptions. Those most relevant to expats include: income of a tax resident arising outside Oman for 18 months starting the day after they stop being a non-resident, which can be used once only; the person's own contributions to compulsory or optional pension and end of service schemes, for up to two schemes; education and healthcare costs for the person and close family, within limits to be set by the regulations; gains on selling a main home in Oman, where the sale takes place more than two years after the Tax Authority was notified of the choice of main home; gains on selling a second home, once in a lifetime; zakat, donations and endowments to approved bodies, up to 5% of gross income; returns on Omani government sukuk, bills and bonds and gains on selling them; compensation received for any reason other than in place of salary; inheritances, bequests, grants and gifts between spouses or first degree relatives; and interest on a loan to buy or build a main home, once in a lifetime. The exemption for salaries earned from work outside Oman applies only to Omani tax residents who are Omani nationals, so it does not help foreign nationals. Gifts and inheritances from people outside the close family exemption, and many investment gains, could be taxable. The scope and conditions of several exemptions depend on the executive regulations, so check them once published.
Annual returns are filed electronically within six months of the end of the tax year, so by 30 June, with any tax due paid at the same time. A person whose only income is salary, wages, board fees or a pension from one employer can ask the employer to file on their behalf. Errors can generally be corrected within three years of the filing deadline, within 30 days of discovering them, unless an audit has begun. Where tax is withheld by a payer other than an employer, the law sets withholding at 20% of the tax due on that income where income from the source exceeds OMR 20,000, and at the full tax due for non-residents. Foreign tax paid on income taxed in Oman can be deducted from the Omani tax on that income, but only up to the Omani tax, with no carry forward of the excess, under rules to be set by the regulations. A particular point for expats is departure: the law requires a person whose residence in Oman ends to file a return at least 60 days before it ends, or before leaving where the departure is sudden and outside their control. Late payment attracts a surcharge of 1% a month, administrative fines can reach OMR 5,000, and knowingly filing false information can lead to imprisonment and fines of up to OMR 20,000.
Under Article 18 of the UK and Oman double taxation convention, a private pension or annuity paid to a resident of one country who is subject to tax on it in that country is taxable only in that country. While Oman has no personal income tax, a UK private or workplace pension paid to an Oman resident is generally not subject to tax in Oman, so UK income tax may continue to apply, as our guide to drawing your UK pension while living abroad explains. From 2028, once Oman taxes residents on pension income, it may become possible to claim that a UK private pension is taxable only in Oman, but whether a pension counts as subject to tax in Oman, particularly where total income is below the OMR 42,000 threshold, and how HMRC will approach claims, are points to confirm rather than assume. UK government service pensions, for example many civil service and armed forces pensions, with classification depending on the scheme and the facts, are generally taxable only in the UK under Article 19, unless the recipient is both resident in and a national of Oman, subject to the facts and HMRC practice. Where a pension is taxable in both countries, Article 22 provides for Oman to credit UK tax against Omani tax on the same income, subject to limits. The UK State Pension can be paid to you in Oman, but Oman is not on the government's list of countries where annual increases are paid, so it is generally frozen at the rate payable when you moved there or first became entitled, if later. From 6 April 2027, most unused pension funds and death benefits are legislated to come within UK inheritance tax, as our guide to inheritance tax on pensions from April 2027 explains.
Moving to Oman does not end UK tax on UK income. UK rental income remains taxable in the UK, and the Non-Resident Landlord Scheme may apply depending on how the letting is managed, and from 2028 it will also form part of an Oman tax resident's gross income, with credit for UK tax under the treaty and the law, as our guide to the Non-Resident Landlord Scheme explains. A sale of UK property or land is within UK capital gains tax for non-residents, with a UK return generally due within 60 days of completion, and from 2028 the gain may also be taxable in Oman, as our guide to selling a UK property as a non-resident explains. Under Article 11 of the treaty, UK interest beneficially owned by a resident of Oman is taxable only in Oman, but only where the recipient is subject to tax on that interest in Oman, which may not be the case below the OMR 42,000 threshold or before 2028. If you were UK resident for at least four of the seven tax years before leaving and return to UK residence within five years, the UK temporary non-residence rules, subject to detailed HMRC conditions, can bring certain gains and income realised while you were away into UK tax in the year of return, as our guide to returning to the UK after years abroad explains. Based on publicly available information, Oman does not currently levy a separate inheritance or estate tax on individuals, although from 2028 inheritances outside the close family exemption may count as income, and since 6 April 2025 UK inheritance tax on worldwide assets depends on long-term UK residence: broadly, someone UK resident for at least 10 of the previous 20 tax years, with that status continuing for between 3 and 10 tax years after leaving depending on residence history, and UK assets remain within UK inheritance tax regardless. With the tax starting on 1 January 2028, the period before then is a chance to understand which of your income and assets would fall within it, how the timing of gratuities, pension withdrawals and disposals interacts with the start date and the 18 month exemption for new arrivals, and whether your records will support the returns. Whether any change is appropriate depends on your circumstances, and someone below the threshold may still have UK tax, reporting, treaty or departure points to consider.
The point people most often miss is that the OMR 42,000 threshold is measured against everything a resident receives, not just their Omani salary. UK rent, pensions, dividends and gains all count, and in normal circumstances the departure return has to be filed before you leave. Understanding how your income maps against the rules before 2028 can help, even below the threshold, where UK tax and treaty points can still matter. This is general information, not personal advice, and whether any action is appropriate depends on your circumstances.
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The threshold is tested against gross income from all sources. For a tax resident, UK rent, pensions, dividends, interest and gains count alongside an Omani salary.
Both are listed as sources of gross income from 2028, and employers are required to withhold tax on them, so the year a gratuity is received can matter.
The exemption for salaries earned from work outside Oman applies only to Omani nationals who are tax resident. Foreign nationals who are resident are taxed on worldwide income above the threshold.
The law requires a return at least 60 days before residence ends, unless the departure is sudden and outside your control. Planning an exit from 2028 onwards needs to allow for this.
UK government service pensions generally stay taxable only in the UK, and relief for private pensions depends on the pension being subject to tax in Oman and on HMRC accepting a claim.
Long-term UK residence status can continue for up to 10 tax years after leaving, UK assets remain within UK inheritance tax, and most unused pension funds are legislated to come within it from April 2027.
Expats in Oman are asking what the new tax means for their UK pensions and end of service gratuities. Both count as income from 2028, and the treaty position on UK pensions depends on the type of pension and how Oman taxes it. The timing of pension income involves UK and Omani tax, investment risk and longer term plans, which interact differently for each person. This is general information, not a recommendation, and any decision needs individual advice.
Illustrative example only, not a real client. This example is simplified and fictional, applies the Oman Personal Income Tax Law as published and the UK rules for 2026 to 2027 as stated assumptions, assumes the executive regulations do not change the points described, ignores currency movements and costs, and is not a guarantee of any outcome. It does not describe advice given to any client, does not represent the experience of actual clients and does not illustrate a recommended course of action. Mark and Sarah are British and have lived in Muscat for nine years, where Mark works for an Omani company on a salary of around OMR 36,000 a year. They own a let flat in Leeds, Mark has a UK workplace pension he plans to start drawing at 57, and both hold investments built up while abroad. Mark expects an end of service gratuity when he retires in 2029. They assumed the new tax would not affect them because Mark's salary is below OMR 42,000.
In this fictional example, a hypothetical review by a regulated financial adviser, working alongside UK and Omani tax specialists, explained that, on these assumptions, both would be Oman tax residents from 2028 and that the threshold would be tested against each person's gross income from all sources, including their shares of the Leeds rent, any pension income and investment gains. It flagged that a gratuity received in 2029 would count as income for that year; that UK tax on the rent would continue, with credit in Oman for UK tax under the treaty; that relief from UK tax on Mark's pension would depend on how the treaty applied once Oman taxed pensions; that a return would be required at least 60 days before their residence ended if they left Oman after 2027; and that their UK inheritance tax position needed checking. It identified that the timing of pension withdrawals, any disposals and their eventual departure could be relevant factors requiring separate advice, and did not recommend any course of action.
Illustrative outcome only: this does not assess suitability or recommend any course of action, and no tax outcome, liability or saving is guaranteed. On these assumptions, the issues that would need consideration include whether each of them would exceed the threshold once all income is counted, the year in which the gratuity and any pension income would be received, how UK and Omani tax on the rent and pension would interact, and the departure filing rule. Whether any change to how their pensions or investments are held would be appropriate is a separate question needing its own suitability assessment and tax advice, and advice may conclude that no changes are suitable. Different facts, such as leaving Oman before 2028, could produce a very different result.
Illustrative example, not a real client.
Clarity Global Wealth helps British expats living in Oman, moving there or planning their next move understand how Omani and UK tax rules could apply to their income, pensions, investments and estate before they act. Clarity Global Wealth is an introducer and does not itself give financial advice. We can arrange a free introduction to regulated financial planning with a separate regulated financial adviser; the introduction is an initial conversation, not advice, and places you under no obligation to proceed with advice or any product, so you can review your position with a regulated financial adviser where advice is appropriate. Any charges for advice would be explained to you before you proceed. The value of investments and pension funds can fall as well as rise, tax treatment depends on individual circumstances and can change, and advice may conclude that no changes are suitable. Clarity Global Wealth does not provide tax, legal or accounting advice, and adviser comments in this guide are general information, not personal recommendations. Omani and UK tax returns and tax opinions are work for qualified tax specialists, so where that is needed we coordinate with them.
Related guides: Becoming a Tax Resident in the UAE, Moving From the UK: The Statutory Residence Test, UK Income Tax for Expats Abroad, Drawing Your UK Pension While Living Abroad, The Non-Resident Landlord Scheme, Selling a UK Property as a Non-Resident, Inheritance Tax on Pensions from April 2027 and Returning to the UK After Years Abroad.
This guide is provided for general information only and reflects our understanding of the rules as at the date of publication. It is not personal financial, investment, pension or tax advice, and should not be relied upon as such. Rules and tax treatment can change and depend on your individual circumstances and country of residence. You should always seek regulated advice specific to your situation before taking action.
Not on salaries at the moment. Oman's Personal Income Tax Law introduces a 5% tax on individuals, including expats, from 1 January 2028. It applies to the part of gross income above OMR 42,000 a year, after exemptions, costs and losses.
A person whose stay in Oman exceeds 183 days, continuous or intermittent, in a calendar year. Residents are taxed on worldwide income above the threshold, while non-residents are taxed only on income arising in Oman.
From 2028, pensions and end of service gratuities are listed as sources of gross income, and employers will be required to withhold tax on them. Whether tax is due depends on your total gross income for the year, exemptions and the executive regulations.
Under Article 18 of the UK and Oman treaty, a private pension paid to a resident who is subject to tax on it in that country is taxable only there. Until Oman taxes pensions, UK tax generally continues, and from 2028 whether a pension is subject to tax in Oman, particularly below the threshold, needs checking. UK government service pensions are generally taxable only in the UK.
Yes. Income of a tax resident arising outside Oman is exempt for 18 months starting the day after they stop being a non-resident, and the exemption can be used once only. The executive regulations may add conditions.
The law requires a person whose Omani residence ends to file a return at least 60 days before it ends, or before leaving if the departure is sudden and outside their control. UK rules, such as temporary non-residence, may also apply if you return to the UK.
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