One of the most signed treaties by the Sultanate of Oman is a DTT, also known as a Double Taxation Agreement (DTA). It is a bilateral agreement between two countries that aims to prevent the same income from being taxed by both jurisdictions, thus facilitating the flow of foreign investment. A DTT clearly outlines which country has the primary taxing rights, this clear structure and the elimination of the burden of double taxation are great advantages to foreign investors.

It is very rare for DTTs to have identical provisions, as the process of signing one involves starting with a model agreement and involves a cycle of negotiations between the governments regarding priority over taxing rights and the exact anti-abuse policies they want to implement. For example, a principal purpose test is a provision that can deny the benefits of the treaty if the true purpose was only to exploit those benefits. Model agreements are published by large organisations like the UN and the OECD, and many countries follow the models with small tweaks to better suit their interests. A provision mandating tax withholding by parties in the Sultanate is not uncommon in treaties it signs.

The Sultanate has signed at least 40 DTTs with countries across the globe, the most recent one being signed with Bahrain earlier this year and recently ratified by Royal Decree 62/2025. While it might seem unusual that Oman has signed DTTs with only two countries in the GCC, one of its closest groups of allies, but this is due to the relatively new implementation of tax systems in GCC countries, and it is very likely that we will see such treaties emerge with the complete implementation of tax systems in GCC countries.

In a practical example of the application of a DTT, if a consultant based in Spain was hired for a project by a company based in Oman, under article 52 of the Omani Income Tax Law, the Omani company should withhold tax in connection with any payment made to the Spanish consultant. However, to avoid double taxing the same revenue twice, the DTT between Oman and Spain stipulates in article 14 that income derived by such a consultant can only be taxed in the country of residence and not the other countries, which eliminates the requirement of withholding tax in Oman, and therefore reduces the tax liability of this consultant when doing work in Oman.

Double Taxation Treaties are essential tools in international tax law. They provide clear guidelines for investors and governments on their rights and responsibilities—clarity that is crucial when dealing with multiple tax jurisdictions.

You can use Decree search to locate DTTs signed by the Omani government, and you can view the most recent one signed between Oman and Bahrain on the link below:

Written by:

Al-Julanda Al-Rashdi

Al-Julanda is a Legal Intern at Decree. He has previously interned in international and Omani law firms in addition to interning in an in-house legal team in the banking sector. He is interested in commercial law and banking law. He holds an LLB from the University of South Wales.

Confidentiality

Arbitration has the key advantage of confidentiality in its proceedings, where no unrelated party has access to hearings or any related documents. Contrary to that, in traditional courts, all court hearings are public unless an application is submitted under specific circumstances, regulated by the Civil and Commercial Procedures Law, which most commercial cases do not fall under. This can jeopardise sensitive information included in the contract or the dealings in dispute.

Choice of Language

Traditional courts are bound to deal only in the Arabic language, if the dealings and paperwork are in any other language a certified translation of the document must be submitted instead. Arbitration on the other hand is versatile when it comes to the choice of language, the parties have the choice to select the language in which the arbitration can be conducted. This can, for example, allow the parties to conduct the arbitration in English if they wish to.

Governing Law

Similar to the choice of language, in arbitration, the law gives the parties the power to choose the governing law that is used to decide on the matter of the dispute. It is very common to see arbitrations all around the world that are governed by English law. In traditional courts, you are bound by the governing law of the Sultanate and the parties to do not have the power to change this law.

Selection of Judges and Arbitrators

The selection of Judges is outside the control of the party litigating in traditional courts. On the other hand, arbitration allows the parties choose the number, criteria, and the actual arbitrators that will decide on the matter in dispute. This may be more efficient if the case has many technicalities, in this case the arbitrator can be an expert in the same field instead of traditional courts employing an expert themselves. 

Conclusion

Arbitration provides many advantages through its flexibility and customisability to suit business needs. I highly recommend anyone interested in business disputes to familiarise themselves with the Law of Arbitration in Civil and Commercial Disputes.You can read it in full in English on the link below:

Written by:

Al-Julanda Al-Rashdi

Al-Julanda is a Legal Intern at Decree. He has previously interned in international and Omani law firms in addition to interning in an in-house legal team in the banking sector. He is interested in commercial law and banking law. He holds an LLB from the University of South Wales.