Securing a Duqm income tax exemption under Oman’s transitional framework

The client is an Oman-incorporated company licensed in the Special Economic Zone at Duqm to trade in metals. As an Oman resident company, its trading profits would ordinarily be subject to Oman income tax at the standard corporate rate.

The challenge

Oman’s Law of Special Economic Zones and Free Zones, issued by Royal Decree No. 38/2025, introduced a new framework for income tax exemptions. However, the Executive Regulation governing the application of the new law had not yet been issued when the client sought the exemption. Article III of Royal Decree No. 38/2025 required the Executive Regulation to be issued within one year. It also expressly provides that, until the Executive Regulation and the necessary implementing decisions are issued, existing regulations and decisions continue to operate to the extent that they do not conflict with the new law.

Accordingly, the existing Duqm tax exemption rules issued under SEZAD Decision No. 236/2015 continued to apply insofar as they were consistent with Royal Decree No. 38/2025,. However, it remained unclear whether an application submitted under the procedure prescribed by Decision No. 236/2015 would be accepted and considered for an exemption under the new law.

How we supported the client

We assessed the client’s eligibility under Royal Decree No. 38/2025 and the continuing Duqm exemption rules. 

To clarify the applicable procedure, we submitted a written enquiry to the Oman Tax Authority, which confirmed that, until the relevant implementing regulations are issued, an application under Article 27 of Royal Decree No. 38/2025 may be submitted in accordance with the procedure prescribed by SEZAD Decision No. 236/2015. It also confirmed that applications submitted under that procedure would be considered for an exemption under the new law.

On that basis, we:

• prepared the exemption application and collated the supporting documentation; and
• supported the filing process and responses required for the application to progress.

The result

The application was approved. A ministerial decision was issued granting exemption to the client from income tax for five years from the commencement of its activity on 25 March 2026.

Why this matters and how we can help

The case confirms that, pending the issuance of the Executive Regulation under Royal Decree No. 38/2025, an eligible Duqm enterprise may apply for an income tax exemption using the procedure prescribed by SEZAD Decision No. 236/2015.

The Applicants must nevertheless demonstrate that they satisfy the applicable eligibility conditions, including the Omanisation and in-Zone activity requirements. 

We can assist with assessing eligibility, preparing the exemption application, and progressing it.