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Interest to a foreign lender

Do we withhold on interest paid to a foreign bank?

The situation

WHT on interest to non-residents has been suspended indefinitely, with some exceptions.

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
  • Income Tax Law (thin capitalisation): Debt to equity of 2:1 for deducting interest on related party loans

What it means for you

Interest is generally paid gross. For related party loans, check the 2:1 thin capitalisation limit for deductibility. Check whether any exception applies to your loan.

What to do

  1. Confirm the loan type.
  2. Pay interest gross.
  3. Check thin capitalisation.
  4. Document.

We can do this for youWithholding tax on royalties, technical and management fees to non-residents: OMR 75

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