News from MEAI
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01.04.2026
The introduction of personal income tax (PIT) from 2028 will mark a historic change, while the Golden Visa program is already opening new perspectives for international executives and investors.
For German companies, these developments translate into greater planning security, enhanced talent retention and broader options for long-term investments.
To understand what these changes mean for German SMEs, we at Departer spoke with Dr. Constantin Frank-Fahle, LL.M., Founding Partner at emltc and a leading legal and tax expert. He provides insights into planning security, talent retention and long-term investment opportunities in Oman.
INTRODUCTION TAX 2028
Why is Oman introducing income tax now? What economic or structural developments are driving this move?
Dr. Constantin Frank-Fahle: Oman is introducing a nominal 5% Personal Income Tax (“PIT”) to diversify its revenue base and to reduce dependency on hydrocarbon-related revenues. This aligns with Oman Vision 2040 and recommendations from the IMF. The tax, effective from January 1, 2028, applies to individuals (citizens and non-citizens) earning above OMR 42,000 (approx. EUR 93,000), impacting less than 1% of earners. Numerous deductions and exemptions exist to reduce or eliminate the burden.
What is your personal view: is this a necessary modernization or could it pose a disadvantage to Oman’s competitiveness?
Dr. Constantin Frank-Fahle: This is a necessary modernization. Compared to other GCC states, Oman has fewer oil reserves per capita. The limited scope of PIT does not significantly affect Oman’s competitiveness.
Do you think Oman is being observed as a test case in the Gulf? Could this step influence countries like the UAE or Saudi Arabia?
Dr. Constantin Frank-Fahle: The UAE and Saudi Arabia have both stated no current plans to introduce PIT. Oman’s move is unlikely to directly influence them given current circumstances.
Yasha Grigoleit: What are the consequences for German SMEs already active in Oman or considering expansion there?
Dr. Constantin Frank-Fahle: German SMEs are unlikely to be significantly affected as most do not pay salaries above OMR 42,000 (with the exception of management positions). For those who do, affected employees may seek higher compensation. PIT starts in 2028, allowing time for budget adjustments.
How will the introduction of income tax influence investment and location strategies from the perspective of international companies?
Dr. Constantin Frank-Fahle: PIT has limited influence unless many high-salary employees are involved. Even then, factors like cost of living, infrastructure, and access to talent are more decisive.
Are there already insights into how the income tax will be designed, e.g. thresholds, exemptions or tax brackets for expatriates?
Dr. Constantin Frank-Fahle: PIT applies to all individuals earning above OMR 42,000. Deductions apply for education (schooling fees), healthcare, zakat, etc. Exemptions exist for diplomats, foreign-earned income, pensions, property gains, and government-issued sukuk earnings.
How significantly could international professionals and executives be affected, contractually and financially?
Dr. Constantin Frank-Fahle: International professionals and executives are only marginally affected. Even if their income exceeds the threshold, they can claim numerous deductions and exemptions. The applicable tax rate is also moderate.
Depending on the contractual arrangement, employers may be required to bear the tax burden. Additionally, employees should review any potential double taxation risks — for example, if they remain tax-resident in a different country.
Tax-free assignments have long been a core incentive in the region. How should HR teams respond to this change?
Dr. Constantin Frank-Fahle: HR departments should indicate the tax liability when advertising high-paying positions in Oman. Additionally, benefits such as education and healthcare allowances could be offered, as these are tax-deductible. It is also conceivable to include a so-called Tax Equalisation Clause, under which the employer assumes any additional tax burden incurred in the host country.
What concrete strategies should HR leaders implement to prepare for 2028?
Dr. Constantin Frank-Fahle: HR should support employees with PIT training, maintain handbooks, and assist with documentation to claim deductions.
How does Oman compare to other GCC countries, particularly tax-friendly hubs like the UAE?
Dr. Constantin Frank-Fahle: Oman offers lower living and operating costs and is strategically located. However, UAE and Qatar are more attractive for high-end talent. Oman’s corporate tax is 15% versus UAE’s 9%. VAT is 5% (same as UAE).
That said, Oman has historically been a first mover in the region in many areas, such as Omanisation and localisation policies. It is therefore not surprising that Oman is now also the first GCC country to introduce a personal income tax.
Could Oman’s move trigger a domino effect? How likely is it that the UAE or others will follow suit?
Dr. Constantin Frank-Fahle: Although the United Arab Emirates and Saudi Arabia have publicly stated that they do not intend to introduce personal income tax at this time, the introduction of such a tax in these countries appears to be less a question of if and more a question of when. In the short term, the Omani reform is therefore unlikely to have any direct impact on other GCC states.
That said, the UAE closely monitors tax policy developments across the region. Given that the UAE has strategically positioned itself as the jurisdiction with the lowest corporate tax rate in the GCC, there is good reason to believe that any future income tax would be set below the thresholds or rates introduced in the Omani model. It can also be expected—similar to Oman—that generous deductions and exemptions would be granted, particularly for education and healthcare-related expenses.
GOLDEN VISA
What exactly is Oman’s Golden Visa and who qualifies?
Dr. Constantin Frank-Fahle: The so-called Golden Visa in Oman, officially referred to as the Golden Residency Program, is a long-term, renewable residency program with no sponsorship requirement.
Eligible applicants are investors with a minimum of OMR 200,000 (approx. USD 520,000) in one of the following categories:
What are the tangible benefits?
Dr. Constantin Frank-Fahle:
How does the Golden Visa fit into Oman’s broader strategy?
Dr. Constantin Frank-Fahle: The Golden Visa is a central cornerstone of Oman’s “Vision 2040,” focused on economic diversification, reducing reliance on hydrocarbons, and strengthening the private sector.
What opportunities does it create for DACH SMEs?
Dr. Constantin Frank-Fahle:
Are there any intersections between PIT (from 2028) and Golden Visa?
Dr. Constantin Frank-Fahle:
Conclusion
The combination of PIT reform and the Golden Visa demonstrates Oman’s strong commitment to economic transformation. For German SMEs, this creates new perspectives: tax frameworks become calculable, talent can be retained long-term, and investments can be planned with greater certainty.
Together with our partner emltc, Departer guides companies step by step from relocating executives and structuring compensation packages to making strategic location decisions in the Middle East.
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