Financial Crime World

Oman Adopts Automatic Exchange of Financial Account Information to Enhance Tax Compliance

AEOI Implemented Through Royal Decree and Tax Authority Decision

On September 21, 2020, the Sultanate of Oman ratified the automatic exchange of financial account information (AEOI) through Royal Decree No. 118/2020 and Tax Authority Decision No. 78/2020.

Global Standard for Combating Tax Evasion

The AEOI is a global standard developed by the Organisation for Economic Co-operation and Development (OECD) to combat tax evasion and enhance transparency in financial transactions. The implementation of the Common Reporting Standard (CRS) aims to reduce the risk of tax evasion and improve tax compliance.

Compliance Requirements for Reporting Financial Institutions

Reporting Financial Institutions (RFIs) such as:

  • Banks
  • Funds
  • Brokers
  • Custodians
  • Insurance companies offering cash value or annuity products

must have processes and procedures in place to meet their compliance requirements. The first reporting deadline is October 31, 2020, covering financial accounts maintained from July 1, 2019, to December 31, 2019.

Requirements for Individuals and Entities

Individuals and entities that are not RFIs should be prepared to provide relevant documentation to support their tax residency status. The AEOI requires RFIs to review pre-existing account holders and identify those who are tax residents of CRS participating countries.

Reporting Obligations

RFIs will need to report details of these accounts, including:

  • Address
  • Tax identification number(s)
  • Date and place of birth (for individuals)
  • Account balances
  • Other relevant information

to the Oman Tax Authority on an annual basis.

Penalties for Non-Compliance

Penalties for non-compliance have not been stipulated in TA Decision 78/2020. However, the Tax Authority may take all actions necessary to obtain required information from taxpayers.

Expected Benefits

The implementation of AEOI is expected to enhance tax compliance and reduce the risk of tax evasion.

Entity Classification Under CRS Requirements

Entities and branches of foreign entities based in Oman will need to assess their classification under the CRS requirements to determine whether they are classified as RFIs and have reporting obligations under the CRS rules.

Contact Information

For more information on this development, please contact:

  • Ernst & Young LLC, Muscat
  • Ernst & Young LLP (United States), Middle East Tax Desk, New York