Gross up where supplier bears no tax
Our contract says the foreign supplier receives the full amount. How much WHT?
The situation
When a contract requires the Oman payer to bear the WHT, the payment is grossed up.
The law
- Income Tax Law (withholding tax on non-residents): 10 percent WHT on royalties, technical service fees and management fees paid to non-residents; dividend and interest WHT suspended indefinitely from January 2023
What it means for you
For OMR 9,000 paid in full to the supplier, the gross amount is 9,000 / 0.9 = OMR 10,000, and WHT is OMR 1,000. That OMR 1,000 is your extra cost. Add a WHT clause when you renew the contract.
What to do
- Read the tax clause.
- Compute the gross up.
- File and pay.
- Renegotiate at renewal.
We can do this for youWithholding tax on royalties, technical and management fees to non-residents: OMR 75