Oman’s top-up tax framework has entered a new phase following Royal Decree 101/2026. The amendment changes the way multinational groups manage top-up tax obligations in the Sultanate, bringing registration, reporting, payment and enforcement requirements into sharper focus.
For large businesses operating in Oman, the important question is no longer just whether their profits fall below the global minimum tax rate. They also need to understand how the amended law affects their group structure, tax reporting responsibilities and compliance processes.
Oman top-up tax 2026 forms part of the OECD’s Pillar Two global minimum tax initiative. The framework targets large multinational enterprise (MNE) groups and aims to ensure that qualifying profits are subject to a minimum effective tax rate of 15%.
Royal Decree 101/2026 amends the law introduced under Royal Decree 70/2024. Its most significant changes include removing the Income Inclusion Rule from Oman’s framework and establishing clearer administrative requirements for businesses within scope.
Oman’s Top-Up Tax: What Large Businesses Need to Understand
Oman introduced its top-up tax framework through Royal Decree 70/2024 as part of the global minimum tax initiative.
The framework applies to qualifying multinational groups with consolidated annual revenue of at least EUR 750 million in at least two of the four fiscal years immediately preceding the relevant year, subject to applicable exclusions.
The purpose is to address situations where qualifying multinational profits are taxed below the 15% minimum effective tax rate under the Pillar Two rules.
Top-up tax is not the same as ordinary corporate income tax in Oman. It operates under a separate calculation framework and applies to qualifying multinational groups rather than every company operating in the Sultanate.
How Top-Up Tax Differs from Corporate Income Tax in Oman
Oman’s corporate income tax generally applies at 15% to taxable income for most businesses. Top-up tax, however, follows the Pillar Two framework and focuses on the effective tax rate calculated for qualifying multinational groups.
| Corporate income tax in Oman | Top-up tax in Oman |
| Applies under Oman’s domestic income tax rules | Applies under the multinational top-up tax framework |
| Generally calculated on taxable income under domestic rules | Calculated using applicable Pillar Two rules |
| Covers businesses subject to domestic income tax | Targets qualifying multinational enterprise groups |
| Domestic tax incentives affect tax treatment under local law | Tax incentives may also affect the Pillar Two effective tax rate |
What Royal Decree 101/2026 Changes
Royal Decree 101/2026 was issued on 29 October 2026 and published in Official Gazette Issue No. 1672 on 1 November 2026. It amends the top-up tax law introduced by Royal Decree 70/2024.
The decree generally took effect on 2 November 2026. Several specified provisions apply retrospectively to tax years beginning on or after 1 January 2025.
The amendment changes both the substance of Oman’s top-up tax framework and the way businesses must manage their compliance responsibilities.
Removal of the Income Inclusion Rule
One of the most significant changes is the removal of the Income Inclusion Rule (IIR) from Oman’s amended top-up tax law.
The IIR previously addressed top-up tax on low-taxed profits of foreign constituent entities through qualifying parent entities.
With the amended framework, Oman’s law focuses on the domestic minimum top-up tax applicable to qualifying profits in Oman. The removal of the IIR does not mean that all international Pillar Two obligations disappear. Multinational groups still need to consider the rules applicable in other jurisdictions where they operate.
Domestic Minimum Top-Up Tax Remains Central
The domestic minimum top-up tax remains the core of Oman’s framework.
It allows Oman to address qualifying low-taxed profits generated within the Sultanate, including profits affected by certain tax incentives or exemptions.
For example, a multinational group may benefit from a tax incentive that reduces the effective tax rate on its Omani profits. The incentive does not automatically remove top-up tax exposure.
Businesses need to assess their tax incentives under the relevant Pillar Two calculation rules rather than relying only on the headline corporate income tax rate.
Registration and Designated Filing Entity Requirements
The amended law introduces clearer registration responsibilities for constituent entities subject to top-up tax.
In-scope entities must register within the prescribed 120-day period from becoming subject to the tax and identify a Designated Filing Entity (DFE) for relevant reporting obligations.
Businesses need to determine which entity will coordinate registration, reporting and communication with the Tax Authority. A clear filing structure helps prevent inconsistent information and missed compliance requirements.
New Return and Payment Requirements
The amended framework sets out more explicit obligations for filing top-up tax returns and the GloBE Information Return (GIR).
The returns are generally due within 15 months after the end of the reporting financial year, with payment linked to the applicable filing deadline.
For multinational groups, this means tax reporting needs to be coordinated across finance, accounting and tax teams. The information required for Pillar Two calculations may come from several entities and jurisdictions. A centralised reporting process helps businesses collect data, review calculations and prepare supporting documentation before the deadline.
Record-Keeping and Enforcement
Royal Decree 101/2026 Oman also strengthens the administrative and enforcement framework.
Businesses within scope need to maintain relevant accounting records, supporting documents and tax information for the required retention period.
The amended law introduces penalties and enforcement provisions for non-compliance. These make accurate reporting, timely registration and proper record retention important parts of tax governance. Large groups should review their internal procedures to ensure responsibility for top-up tax compliance is clearly assigned.
Which Businesses Are Affected by Oman Top-Up Tax 2026?
The top-up tax in Oman framework is aimed at large multinational enterprise groups, not all businesses operating in Oman.
A group generally falls within scope when it meets the consolidated revenue threshold of at least EUR 750 million in at least two of the four preceding fiscal years and has relevant constituent entities in Oman. The threshold is assessed at the multinational group level. An Omani subsidiary does not need to generate EUR 750 million in revenue on its own.
Multinational Groups with Omani Operations
Businesses should review their exposure if they:
- Operate through subsidiaries, branches or permanent establishments in Oman.
- Belong to a multinational group that meets the revenue threshold.
- Benefit from tax incentives or exemptions in Oman.
- Have centralised tax reporting responsibilities outside the Sultanate.
- Need to coordinate financial and tax information across multiple jurisdictions.
Do SMEs and Standalone Businesses Need to Pay Top-Up Tax?
Standalone Omani businesses and most SMEs fall outside the top-up tax framework because they do not meet the multinational group revenue threshold.
However, a relatively small Omani company can still be affected if it belongs to a qualifying multinational group. Businesses should therefore assess their group relationships rather than determine applicability solely from their own annual revenue.
What the New Law Means for Multinational Businesses
The amendments have practical consequences for tax planning, reporting and financial management.
Tax Incentives Need a Fresh Review
Businesses benefiting from tax incentives should review how those incentives affect their Pillar Two calculations. A tax exemption that reduces ordinary corporate income tax does not automatically eliminate top-up tax exposure.
Multinational groups need to assess the effective tax rate under the applicable rules and consider how incentives affect their overall tax position.
Group Reporting Needs Better Coordination
Top-up tax reporting often involves financial information from several entities.
The designated filing entity needs access to reliable information from Omani subsidiaries and the wider group. Tax teams should coordinate with finance, accounting and management to ensure the data is complete and consistent.
Previous Tax Years Need Attention
The retrospective application of specified provisions means the amendments are not limited to future tax years.
Businesses should review the relevant provisions against tax years beginning on or after 1 January 2025.
Compliance Responsibilities Need Clear Ownership
The amended framework makes it important to assign responsibility for registration, reporting, tax calculations and record retention.
Multinational groups should identify the teams responsible for each task and establish a process for reviewing the information before submission.
How Businesses Should Prepare for Royal Decree 101/2026
A practical review helps businesses understand the impact of the amended law without disrupting their existing tax operations.
Confirm the Group’s Scope
Review consolidated revenue for the relevant four-year period and determine whether the group meets the threshold. Identify the Omani entities that may fall within the framework.
Review the Amended Provisions
Compare Royal Decree 101/2026 with the previous framework. Focus on the removal of the IIR, domestic top-up tax treatment, registration, filing, payment and record-keeping requirements.
Identify the Designated Filing Entity
Confirm which entity will coordinate the relevant reporting responsibilities in Oman.
Establish communication between local finance teams and the group’s central tax function.
Assess Tax Incentives and Effective Tax Rates
Review existing tax incentives and exemptions to determine their implications under the top-up tax calculation rules. This assessment should use the applicable Pillar Two requirements rather than the domestic tax rate alone.
Review Reporting Systems and Supporting Records
Ensure the group can collect the information required for tax calculations and returns.
Maintain supporting documents, financial information and records in an organised manner.
Monitor Implementation Guidance
The amended law leaves certain calculation and implementation details to further regulations and guidance. Multinational groups should monitor relevant updates from Oman’s Tax Authority and review their compliance position as additional guidance becomes available.
How MFN Auditing Supports Tax Compliance in Oman
Royal Decree 101/2026 introduces changes that multinational businesses need to assess alongside their existing tax and financial reporting responsibilities.
MFN Auditing provides taxation advisory services to help businesses understand Oman’s tax requirements, review their financial and regulatory responsibilities, and manage their compliance processes. For large multinational groups, professional tax support can help assess relevant obligations, organise reporting responsibilities and identify areas requiring further review under the amended top-up tax framework.
FAQs
What is Oman top-up tax 2026?
Oman top-up tax is part of the country’s implementation of the OECD Pillar Two global minimum tax framework. It aims to ensure qualifying multinational groups are subject to a minimum effective tax rate of 15% on relevant profits.
What does Royal Decree 101/2026 change?
Royal Decree 101/2026 amends the top-up tax law introduced under Royal Decree 70/2024. It removes the Income Inclusion Rule from Oman’s amended framework and establishes clearer registration, filing, payment and enforcement requirements.
Which businesses are subject to top-up tax in Oman?
The framework generally applies to constituent entities of multinational groups with consolidated revenue of at least EUR 750 million in at least two of the four preceding fiscal years, subject to applicable exclusions and conditions.
Does top-up tax replace corporate income tax in Oman?
No. Top-up tax operates separately from ordinary corporate income tax. Businesses continue to assess their domestic income tax obligations, while qualifying multinational groups also need to consider the Pillar Two framework.
When must businesses register and file under the amended law?
The amended law provides a 120-day registration period from becoming subject to the tax. Top-up tax returns and the GloBE Information Return are generally due within 15 months after the reporting financial year ends.