The following expense types are not deductible for Omani tax purposes:
- Expenses incurred in the generation of tax-exempt income;
- Capital expenditure;
- Expenses allocated from the head office or other group companies are limited to 3% of gross income (5% in the case of banks and insurance companies, and 10% in case of high-tech industrial activities);
- Expenses recoverable under insurance or indemnity contract;
- Profits taxes;
- Reserves and provisions (allowed for bank and insurance companies in certain cases);
- Effective 1 January 2018, salary/ wages paid to owner or partners exceeding below limits:
- more than OMR 3,500 per month (previously OMR 3,000) for companies carrying on professional activities; and
- OMR 1,500 per month (previously OMR 1,000) for all other companies; and
- Effective 1 January 2018, salary/ wages paid to owner or partners engaged in management exceeding below limits:
- more than 35% (previously 30%) of taxable income for the year, before deduction of salary/ wages and losses carried forward for companies carrying on professional activities; and
- 25% (previously 10%) for all other companies.
In response to the COVID-19 pandemic, Oman announced certain tax relief measures including allowing donations or contributions made by taxpayers for the purpose of dealing with the COVID-19 pandemic in Oman as tax deductible, subject to the burden of proof on the taxpayer.