Oman is one of the oldest states of the East with a fast developing economy. For the last few years, Oman has been actively conducting a policy of attraction of foreign companies. The jurisdiction has requirements regarding annual preparation and filing of financial statements.
The calculator allows you to calculate the approximate cost of maintenance of accounting services to support and audit the company.Calculate
Financial statements requirements in Oman are regulated by the Commercial Companies Law No. 18/2019.
Companies incorporated in Oman must prepare their financial statements in accordance with the international financial reporting standards. The accrual method is used to prepare accounts.
Financial statements of a company consist of the following documents:
The first reporting period of a company may not exceed 18 months after the date of its incorporation. Each subsequent reporting period lasts 12 months. If a company wants to change the date of the end of its reporting period in the future, it must request confirmation from the Secretariat General for Taxation at the Ministry of Finance. A company may decrease its reporting period if that period is its liquidation period: the date of the company’s termination will be the date of the end of its reporting period.
Financial statements are normally in Omani riyals (OMR). If a company wants to change its reporting currency, it needs to request a permission from the Ministry of Finance.
Accounting is in English and does not require translation into Arabic.
Accounting records must be kept for 10 years after the end of the reporting period.
Financial statements shall be filed with tax authorities along with a tax return. Companies have no obligation to file financial statements with the Ministry of Commerce, Industry, and Investment Promotion, but they must prepare financial statements and provide them if the Ministry requests so.
In respect of tax periods that started after 1 January 2020 taxpayers must file one tax return (instead of a preliminary return and a final return that used to be filed) within 4 months after the end of the reporting period.
Taxpayer companies used to file a preliminary tax return, where they stated an approximate estimated amount of corporate tax, within 3 months after the end of the reporting period. Then, the final corporate tax return would be filed along with audited* financial statements of the company within 6 months after the end of the reporting period.
Companies incorporated in free zones of Oman are exempt from payment of a number of taxes (including corporate tax) for a period set by the free zone. But such companies are still required to annually file a tax return.
Banks must prepare and file audited financial statements with the Central Bank of Oman within one month after the end of the reporting period. Joint-stock companies shall publish their financial statements quarterly and must provide them to the Capital Market Authority of Oman within 2 months after the end of the financial year.
*in certain cases
The Income Tax Law requires financial statements to be filed with tax authorities of Oman along with a tax return. If a company’s capital exceeds 20 000 OMR, audited financial statements must be enclosed with the tax return. Audit must be conducted by a certified Omani auditor.
At the same time, the Commercial Companies Law obliges limited liability companies to audit their financial statements if:
A company may have more than one auditor. They shall be appointed at an annual general meeting of shareholders.
In accordance with Royal Decree 9/2017, non-compliance with tax legislation results in fines and criminal penalties.
In the case of failure to provide a tax return, a penalty of 100 to 2 000 OMR may be imposed.
Improper declaration of taxable income results in a penalty of 1% to 25% of the difference between the declared corporate tax and the tax assessed by tax authorities.
Failure to provide financial statements and other documents requested by tax authorities results in a penalty of 200 to 5 000 OMR.
Deliberate non-provision of a tax return may be punished by imprisonment of 1 to 6 months. Deliberate non-provision of information, financial statements and failure to keep accounting records for the required 10 years may be punished by imprisonment of 6 months to 3 years and fines of 500 to 30 000 OMR.
Consolidated financial statements shall be made for a group of companies if the parent company holds a majority of shares in the authorized capital of the subsidiary, influences its financial and operating activity or exerts significant influence over the subsidiary when making transactions.