Transfer Pricing — Oman
The current related party rules are included in Income Tax Law No. 28/2009 effective 1 January 2010. Broadly similar related party rules were also included in the old Income Tax Law, the Law of Income Tax on Companies of 1981.
While the current tax law includes related party provisions there are no formalized tax rules on transfer pricing documentation. However, the Oman Tax Authority expects that appropriate TP documentation will be made available under a tax audit or investigation.
Transfer Pricing in Oman
Although there are no specific prescriptive transfer pricing regulations in Oman currently, the tax authorities require related party transactions to be conducted on an arm's length basis, closely aligning with international standards and OECD principles.
Local File
While a formal Local File requirement is not explicitly defined in the law, maintaining documentation that substantiates the arm's length nature of local intercompany transactions is highly recommended to defend against tax audits.
Master File
Multinational enterprises operating in Oman are encouraged to have Master File documentation available, providing the Oman Tax Authority with a high-level overview of their global business operations and transfer pricing policies.
Country by Country Reports
Oman has joined the OECD Inclusive Framework on BEPS and is taking steps to implement minimum standards, including Country-by-Country Reporting (CbCR) for applicable multinational enterprise groups.
Database Guidelines
Taxpayers should utilize robust external benchmarking databases to prepare comparability analyses that justify their transfer prices and mitigate the risk of adjustments by the Omani tax authorities.