The 'Paying Taxes 2013' report ranks 185 economies on the compliance and tax burden faced by standard-size firms.
The ease-of-paying-taxes rankings are compiled through three sub-indicators: The number of tax payments, the time afforded for compliance and the total tax rate. The total tax rate measures the burden of all the taxes that a company must pay in relation to its commercial profit.
According to the report, firms in the sultanate face less administrative burden in paying taxes. On average, firms in Oman make 14 tax payments per year and spend 62 hours doing so, much below the global averages. The total tax rate is at 22 per cent of commercial profit in Oman, the report said.
UAE is ranked first globally in ease of paying taxes. “Emirati firms face the lightest administrative burden as they must make only four payments a year and spend 12 hours doing so,” the report said.
Qatar, Saudi Arabia and Bahrain are ranked second, third and seventh, respectively.
Speaking to Muscat Daily, Russell Aycock, tax director at PwC in Oman, said that the sultanate's tax rules and tax forms are reasonably very clear.
“Oman has a very straightforward tax rate and mechanism for paying taxes. The corporate tax, which accounts for the majority of tax collected in the sultanate, is flat at 12 per cent of net profit above RO30,000. Oman has one of the lowest corporate tax rates in the world.”
The report also mentioned that GCC countries could implement a value-added tax (VAT) system over the next two to four years.
“GCC countries continue with their endeavour to introduce a VAT system with a target for doing so in the next two to four years. This includes an intention to harmonise VAT laws that will be introduced by adopting a VAT framework law that will be adopted by all GCC countries, much like the GCC Customs Union law which existed prior to the introduction of a national VAT law,” the report said.
“It is not surprising that economies in the Middle East feature so prominently in the top jurisdictions of the paying taxes indicators. This can largely be attributed to the relatively few taxes levied on the case study company and a reliance on other sources of government revenues,” the report added.