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5.5. Source Rules with Respect to Income Derived by Non-Residents

Dividends

Dividends received from companies that are incorporated and registered in Oman and from foreign companies authorized to operate in Oman are deemed Omani sourced.

Interest

Interest paid by Omani residents to non-residents is deemed Omani sourced.

Royalties

Royalty fees paid for the use of intellectual property in Oman, is deemed Omani sourced.

Rental Income

Rental income from property situated in Oman is deemed Omani sourced.

Service Fees

Service fees are deemed to be sourced in Oman if paid to a non-resident without a permanent establishment or similar taxable presence in Oman. Previously, the tax authorities took the position that service fees paid to non-residents are deemed to be sourced in Oman if the services were performed in Oman. However, in a Guidance issued on 4 March 2018, the tax authorities determined that service fees paid to non-residents are deemed to be sourced in Oman irrespective of whether the services are performed in Oman or abroad.

However, fees paid for the following services to a non-resident are excluded (effective 11 February 2019):

  • Participation in organizations, conferences, seminars or exhibitions;
  • Training;
  • Transport/ shipping and related insurance of goods;
  • Air tickets and accommodation expenses abroad;
  • Board meetings;
  • Reinsurance; and
  • Any services supplied and related to activities or properties abroad.

Research and Development

Research and development fees are deemed Omani sourced if paid to a non-resident without a permanent establishment or similar taxable presence in Oman.

Computer Software

Fees paid for the use of computer software or right to use computer software are deemed Omani sourced if paid to a non-resident without a permanent establishment or similar taxable presence in Oman.