Oman's Domestic Minimum Top-Up Tax: Pillar Two Explained

Royal Decree No. 70/2024 introduced a Domestic Minimum Top-Up Tax (DMTT) and an Income Inclusion Rule (IIR) in Oman, aligning the country with the OECD’s global minimum tax framework under Pillar Two.

This affects a narrow group of companies, but for those it does affect, it matters considerably.

Who does the DMTT apply to?

Element	Detail
Applies to	Constituent entities of multinational groups
Revenue threshold	Consolidated annual revenue of EUR 750 million or more in at least two of the preceding four fiscal years
Minimum effective rate	15%
Effective from	Fiscal years starting on or after 1 January 2025

If your group is below the EUR 750 million threshold, the DMTT does not apply to you. Oman’s standard corporate income tax rate of 15% continues to govern.

What the rules actually do

Pillar Two establishes a floor. Where a multinational group’s effective tax rate in a jurisdiction falls below 15%, a top-up is charged to bring it up to that level.

The Domestic Minimum Top-Up Tax ensures that where the shortfall arises in Oman, Oman collects the top-up itself rather than ceding it to another jurisdiction. The Income Inclusion Rule operates at the parent level, bringing in low-taxed profits of foreign subsidiaries.

Why this matters in Oman specifically

The interaction to watch is with Oman’s Free Zone and Special Economic Zone incentives. Businesses in zones such as Duqm, Sohar, Salalah and Al Mazunah may hold 0% tax holiday status, subject to demonstrating genuine Economic Substance, including Omanisation quotas of roughly 10% to 25% depending on zone and sector.

For an in-scope multinational group, a 0% rate in a zone does not necessarily mean 0% tax. Where the effective rate falls below 15%, the top-up mechanism may apply regardless of the incentive. Groups with Omani zone operations should model this rather than assume the holiday is preserved.

Who should be looking at this

Realistically: subsidiaries of large multinational groups operating in Oman, particularly those in free zones, and Omani-headquartered groups that have grown past the EUR 750 million threshold.

If that describes your group and you have not yet assessed your position, contact us and we will work through the exposure with you.