As part of the global move towards increased tax transparency and combating tax avoidance, Oman has committed to adopting international standards, including the OECD’s Base Erosion and Profit Shifting (BEPS) project. Specifically, in 2019, Oman introduced Country-by-Country Reporting (CbCR) requirements in line with BEPS Action 13. These regulations require multinational enterprises (MNEs) operating in Oman to disclose key financial information related to their global operations. This guide provides Chief Financial Officers (CFOs) and financial executives of MNEs based in or operating through Oman with the essential details they need to determine whether they are affected by CbCR regulations and how to comply.

Applicability of CbCR in Oman

Criteria for Reporting:

• CbCR obligations in Oman apply to multinational enterprise groups with annual consolidated group revenues of 322.5 million Omani rials (OMR) or more in the preceding fiscal year.
• If the ultimate parent entity of an MNE group is tax resident in Oman and meets the revenue threshold, it is required to file a CbC report.
• If the ultimate parent entity is not in Oman, but an entity in Oman is part of the MNE group, and the parent entity’s jurisdiction does not require CbCR or does not exchange information with Oman, the Omani entity may be required to act as the surrogate parent entity.

Relevant Legislation:

• CbCR regulations in Oman were introduced through Ministerial Decision No. 79/2019, which implements the CbCR rules based on the OECD’s BEPS Action 13 framework.
• These regulations outline the reporting obligations and procedures for multinational groups, ensuring alignment with global tax standards.

Reporting Requirements

Information to be Reported:

• The CbC report must include detailed financial and operational information on a jurisdictional basis, including:
  • Total revenues (segregated into related-party and unrelated-party revenues)
  • Profit or loss before income tax
  • Income tax paid and accrued
  • Stated capital and accumulated earnings
  • Number of employees
  • Tangible assets (excluding cash or cash equivalents)
• The report must also contain a list of all constituent entities within the MNE group, indicating the jurisdictions where they operate and their primary business activities.

Form and Submission:

• The CbC report must be filed in the OECD’s XML format, following the globally standardised format for CbCR submissions.
• Reports are to be submitted electronically to Oman’s Tax Authority, through a dedicated online portal.
  • More details on the submission process can be found on the Oman Tax Authority’s website.

Filing Deadlines

• The CbC report must be filed within 12 months following the end of the MNE group’s fiscal year. For example, if the fiscal year ends on 31 December 2023, the report must be submitted by 31 December 2024.
• Additionally, entities in Oman must notify the Oman Tax Authority if they are part of an MNE group subject to CbCR requirements. This notification must be made no later than the last day of the reporting fiscal year.

Penalties for Non-Compliance

Penalties:

• Oman imposes significant penalties for failure to comply with CbCR obligations:
  • Failure to submit the CbC report or submit it on time can result in fines of up to OMR 100,000 (approximately €230,000), depending on the severity of the breach.
  • Inaccurate or incomplete submissions can attract additional penalties, including further financial sanctions and potential reputational damage.
  • Ongoing failure to comply with notification or reporting requirements could result in escalating penalties and further action from the Oman Tax Authority.

Defences:

• MNEs may argue reasonable cause for delays or inaccuracies in submission, such as technical difficulties or unforeseen circumstances. The Oman Tax Authority will evaluate such claims on a case-by-case basis, although businesses are advised to maintain compliance to avoid penalties.

Confidentiality and Use of Information

Data Protection:

• CbC reports filed in Oman are treated as confidential. The data is used for risk assessment purposes by the tax authorities to identify potential base erosion and profit shifting (BEPS) risks but is not used directly for tax assessments.
• Oman exchanges CbC reports with other tax authorities under the Multilateral Competent Authority Agreement (MCAA) and other treaties, ensuring the information is shared only with countries that meet the OECD’s confidentiality and data protection standards.