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Management fees and exceptions

Head office charges us management fees. Is WHT due?

The situation

Management fees to non-residents carry 10 percent WHT, with exceptions such as training and attending meetings, conferences, seminars and exhibitions.

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 (related party transactions): Related party dealings must be at arm's length and disclosed in the return; Tax Authority can recompute income

What it means for you

A OMR 30,000 management fee carries OMR 3,000 WHT. Training and attendance at meetings, conferences, seminars and exhibitions are excluded. The fee must also be at arm's length and supported by evidence of services to be deductible in the return.

What to do

  1. Classify each charge.
  2. Withhold 10 percent where due.
  3. Keep evidence of services.
  4. Disclose in the return.

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

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