Oman Tax Authority confirms 5-year tax waiver on maritime services to attract global shipping

Oman is making waves in the maritime world: the Sultanate has announced a five‑year withholding tax relief for vessels under its flag, aiming to boost shipping activity, attract investment, and position itself as a regional maritime hub .

Oman introduces five-year tax relief for maritime sector
The Sultanate of Oman’s tax authority through its Tax Policy Department under the leadership of Hossam bin Hamad Al Maamari,, has announced a significant incentive for the maritime sector: a five-year suspension of the withholding tax on service contracts performed aboard vessels registered under the Omani flag. This initiative, effective from September 1, 2025, through August 31, 2030, is designed to reduce operational costs for shipping companies and enhance Oman’s position in the global maritime sector. It specifically applies to service contracts onboard ships that are officially registered with the Omani competent authorities and carry an Omani nationality/flag.
The primary objectives of this measure are to:

• Reduce Operational Costs: Directly lower the financial burden on shipping companies and service providers.
  
• Boost Vessel Registration: Encourage a significant increase in the number of vessels flying the Omani flag, enhancing the national ship registry's appeal.
  
• Attract Specialized Investment: Draw in foreign and domestic investment into key supporting sectors like maritime services, ship maintenance, and logistics .
  
• Enhance Competitiveness: Position Oman as a more favourable and cost-effective operating environment compared to its regional and global peers.

Why is Oman doing this?
Oman’s five-year maritime tax relief is part of a broader strategy to strengthen the country’s shipping and logistics sectors, diversify the economy, and enhance competitiveness in the regional and global maritime markets. The initiative is designed to reduce operational burdens for maritime companies, making Oman more attractive for vessel registration, maritime services, and foreign investment . According to the Oman Tax Authority, the measure “directly addresses the needs of the maritime transport industry while encouraging vessel registration under the Omani flag and attracting specialised investments to Oman’s shipping sector.” By promoting Omani-flagged vessels, the Sultanate is signaling its ambition to become a regional maritime hub, leveraging its strategic geographic location, modern ports infrastructure, and regulatory support. This tax relief also aligns with Oman’s broader economic roadmap, including Oman Vision 2040, which aims to reduce reliance on hydrocarbons and develop diversified, sustainable sources of economic growth.

What does this mean for shipping companies and investors?
For shipping operators, maritime service firms and potential investors, the five-year tax relief opens up tangible opportunities:

• Lower costs: With no withholding tax on service contracts onboard eligible vessels, the cost of servicing, repairs, logistics and other maritime services is effectively reduced.
  
• Flag advantage: Vessels might be more inclined to register under the Omani flag to benefit from the relief — boosting Oman’s ship‐registry appeal.
  
• Investment magnet: The relief helps draw in specialised maritime services, ship maintenance, port services and allied logistics firms keen to take advantage of the regulatory advantage.
  
• Competitive positioning: Oman can now offer a more favourable operating environment compared to some peers, thus potentially attracting ships and services that might have been located elsewhere.
  
• Time-limited urgency: The five-year window (2025-30) means firms might decide quicker to relocate or expand operations in Oman to capture benefits before the deadline.

Broader implications for Oman’s maritime sector and economy
The five-year tax relief for Omani-flagged vessels is expected to have wide-reaching effects across Oman’s maritime sector and overall economy. By encouraging more vessels to register under the Omani flag, the Sultanate may experience increased port calls, higher maritime activity, and expanded value-added services such as ship maintenance, crew logistics, and other onboard services. This boost to maritime services also supports job creation, skills development, and growth within the logistics and shipping sectors, aligning with Oman’s broader economic diversification goals. Moreover, the policy enhances Oman’s global maritime standing, attracting more international traffic, increasing visibility, and fostering engagement with global shipping networks. It signals to investors and the international market that Oman is serious about investing in non-oil sectors, potentially encouraging further reforms, partnerships, and investment programmes. However, businesses will closely monitor developments beyond 2030, when the relief expires, as the long-term impact will depend on the continuation of favorable tax and regulatory conditions, along with improvements in infrastructure and the overall maritime ecosystem.