Corporate taxpayers warned against delay

As part of its efforts in beefing up revenue collection, the ministry of finance has warned that corporate income tax be paid by the end of this month.

According to a directive issued by the secretariat general of taxation at the ministry, taxpayers whose financial year ended on December 31, 2016, should submit their provisional returns of income before March 31 and pay the tax due, if any of the basis of such returns.

“All tax payers are required to adhere to the deadline to avoid penalties and punishments stipulated in chapter seven of the income tax law promulgated by Royal Decree no 28/2009 for the failure to submit the return within the prescribed date”, the directive said.

The corporate income tax rate is the amount collected from companies based on their net income obtained while exercising their business activity, normally during one business year.

The Omani government on February 26 last, through Royal Decree 9/2017, gazetted broad tax changes to the income tax law including drastic rise in penalties and fines.

Notable aspects of the proposed tax reforms, for tax years beginning on or after January 1, 2017, include an increase of the general corporate income tax rate from 12 per cent to 15 per cent and the removal of the minimum taxable income exemption of RO 30,000.

At the same time, the maximum penalty for failure to file returns by the due date has been amended to increase from RO 1,000 to RO 2,000.

The maximum penalty for failure to submit information requested by the tax authority or to attend scheduled hearings is raised from RO 2,500 to RO 5,000.

A penalty of up to RO 3,000 may be imposed for failure to comply with the Executive Regulations or administrative decisions.

Intentional refusal by a principal officer to submit tax returns or other requested information can result in imprisonment for a period of 1 to 6 months and/or a fine from RO 500 to RO 20,000.

A second offense within 2 years increases the period of imprisonment to 3 to 12 months and the fine can from RO 2,000 to RO 30,000.

The intentional failure to submit accurate tax returns or the intentional destruction or concealment of documents and records can result in imprisonment for a period from 6 months to 3 years and/or a fine of RO 5,000 to RO 50,000.