Amendments in tax regulations: What you need to know

February 12, 2019

Global audit and advisory firm EY organised a seminar to explain the recently announced amendments and changes in Oman’s income tax regulations to their clients.

The executive regulations clarifying certain provisions of the income tax law were published in the official gazette on February 10 by the Ministry of Finance through the ministerial decision 14/2019, EY said in a report titled as ‘Oman Tax Alert’.

As per the amended regulations, tax authorities in Oman can inspect taxpayer’s workplace during working hours without advance notification, if they suspect tax evasions, EY said in its report explaining the recently announced amendments.

The Secretariat General for Taxation (SGT) is generally required to issue advance notification of the site inspection. ‘However, if the SGT suspects tax evasions, enforcement officers may enter the taxpayer’s workplace during working hours without advance notification to the taxpayer’, the EY report said.

The amendments include changes to withholding tax, deductibility of expenses, tax exemption, administrative procedures, and taxability of enterprises. The executive regulations   clarify certain provisions on withholding tax by providing the definition of the term services, interest and dividend.

The EY tax seminar at Grand Hyatt Muscat was attended by over 200 representatives from various organisations in Oman.

Speaking at the event, Alkesh Joshi, tax partner at EY Oman said, “The recently introduced executive regulations have been the most awaited tax development for a while. The clarification provided by the executive regulations, particularly in the application of withholding taxes on services and interest, will now provide more certainty to the taxpayers.”

According to EY, the executive regulations also cover changes in deductibility of certain expenses such as increase in deductible limits of partner’s remunerations and criteria for deduction of donations in kind. Further, there were also amendments on provisions relating to conditions and procedures for claiming tax exemption.

The executive regulations also prescribed new forms for providing/updating taxpayer information and laid out procedures for obtaining a tax card, electronic filing and on-site inspection.

The amendments generally apply from February 11, 2019, although some amendments apply retroactively to tax years beginning on or after January 1, 2018. Taxpayers should familiarise themselves with the amendments, and their implications when filing tax returns, EY added.