India and Oman have revised their Double Taxation Avoidance Agreement (DTAA), first signed in 1997, to align with evolving global tax standards and cross-border economic realities. The updated pact, which comes into effect from May 28, 2025, aims to provide relief to individuals and businesses earning income in both countries by eliminating the risk of being taxed twice.The revised DTAA will benefit Indian residents with investments or professional engagements in Oman, and vice versa. This includes salaried professionals, freelancers, and business owners earning income across both jurisdictions, according to an ET report.“The revision aims to promote cross-border investments and technology transfer by lowering tax rates on royalties and fees for technical services from 15% to 10%,” Pankaj Agrawal, Associate Director at Grant Thornton, told the financial daily “Further, updates have been made in definitions, mutual agreement procedures (MAP), and enhanced information exchange between the jurisdictions,” he added.Sudhir Kaushik, Cofounder and CEO of Taxspanner.com, said the revised India-Oman tax treaty is a “positive move for fair and clear taxation” that also strengthens information sharing, helping honest taxpayers and reducing tax evasion. He was quoted as saying that the agreement also includes a non-discrimination clause that ensures tax parity between Indian and Omani entities operating in each other’s countries.The revised treaty includes a stronger MAP framework to resolve tax disputes more efficiently and introduces anti-abuse provisions to prevent treaty shopping. It also enhances data exchange protocols, including access to financial and banking information, making cross-border tax evasion more difficult.Oman will also become the first Gulf Cooperation Council (GCC) nation to introduce personal income tax. As per the proposed plan, from January 2028, Oman will levy a 5% income tax on individuals earning above OMR 42,000. Until now, GCC countries such as the UAE, Saudi Arabia, Qatar, and Kuwait have not imposed personal income tax, relying largely on oil revenues.
