For two decades the Gulf has been sold to internationally mobile people with one word: tax-free. The word was always shorthand. What it described was a set of rates that happened to be zero, chosen by governments with oil revenue and no pressing need for anything else. The official texts that describe those zeros are statements of current policy, not guarantees a resident could hold a government to.
Policy changes, and in the Gulf it has been changing for almost a decade, one instrument at a time. Consumption was taxed first, then business profits, then the profits of large multinationals under a global minimum. In June 2025 Oman crossed the line that mattered most to individuals: it enacted a tax on personal income, effective 1 January 2028. By 7 October 2026, Oman's implementing regulations for the income tax were still not in the Official Gazette, more than three months after the deadline the decree set for them.
Read together, the texts lead to one conclusion: a zero rate held by policy is a price, not a promise. It can be raised by the same authority that set it, through the same ordinary procedure. Anyone moving to the region should weigh it the way they weigh any other price that can change.
The zero was never written down
Oman makes the legal mechanism unusually clear. Article 14 of its Basic Law of the State, issued by Royal Decree 6/2021, says that public taxes may only be created, amended or abolished by law, and that nobody is exempted from them except in cases the law sets out. That is a guarantee of procedure, not of outcome. It says how a tax arrives. It does not say that one never will.
The UAE describes its own position the same way, as a matter of current fact. The government portal states that "The UAE does not levy income tax on individuals", and in the next sentence lists the 5% value added tax and excise tax it does levy. The sentence is accurate. It is also in the present tense, which is the point: it describes the system as it stands, and it binds nobody to keep it.
The Brief made the general case in Zero Tax Is Not Zero Cost: the risk that zero does not stay zero is a cost in itself. The Gulf since 2018 is that risk playing out in slow motion.
First instrument: consumption
VAT came first, and it came together. The UAE Ministry of Finance records that VAT "was introduced across the UAE on 1st January 2018 at a standard rate of 5%". Saudi Arabia started at the beginning of the same year at the same rate.
Then Saudi Arabia showed how quickly a rate moves once the instrument exists. According to the ZATCA guideline on the rate change, VAT applied from the beginning of 2018 at a basic rate of 5%, and on 11 May 2020 the Ministry of Finance announced an amendment raising it. From 1 July 2020 the rate was 15%, three times the original, less than two and a half years after launch and with seven weeks' notice.
Oman followed with its own law. Royal Decree 121/2020 was issued on 12 October 2020, published on 18 October and entered into force 180 days after publication, which put the start in April 2021. Article 36 sets the rate at 5%.
The lesson of the Saudi case is not that every Gulf VAT will triple. It is that the hard step is building the machinery: registration, invoicing, returns, audits. Once that exists, the rate is a number in a decree.
Second instrument: business profits
The UAE introduced a federal corporate tax through Federal Decree-Law No. 47 of 2022. The Ministry of Finance states that it "applies to financial years beginning on or after 1 June 2023". Article 3 of the law sets a 0% rate up to an amount fixed by the Cabinet and 9% above it, and Cabinet Decision No. 116 of 2022 fixes that amount: 0% on taxable income up to AED 375,000 and 9% above it.
The design is worth reading closely, because it shows how carefully the line between business and person was drawn. Corporate tax reaches individuals too, but only some of what they do. Under Cabinet Decision No. 49 of 2023, a natural person's business is taxable only where turnover from business activity exceeds AED 1,000,000 in a calendar year. Three kinds of income are outside it regardless of size: wages, personal investment income and real estate investment income, the two investment categories only where the activity is not conducted through, and does not require, a licence.
That is the UAE's personal zero, as it stands: not a principle that individuals are untaxed, but a set of carve-outs inside a corporate tax law. A freelancer with AED 1.2 million of consulting fees is in. A landlord with the same income from unlicensed rentals is out. The Brief looked at one consequence for business owners in the US LLC trap in Dubai.
Third instrument: the global minimum
The third step came from outside. Under the OECD's Pillar Two, large groups are meant to pay at least 15% wherever they operate, and if a low-tax country does not collect the difference, another country can. The UAE chose to collect it at home.
The Ministry of Finance states that the domestic minimum top-up tax applies to constituent entities of multinational groups with annual global revenues of EUR 750 million or more in at least two of the four preceding financial years, and that it "was effective across the UAE for financial years starting on or after 1 January 2025". The Ministry describes the rules as closely aligned with the OECD's GloBE Model Rules, and explains their purpose as "preventing foreign jurisdictions from collecting top-up tax on UAE profits" of in-scope entities. The rules apply only to members of multinational groups; a group that operates only inside the UAE is outside them, whatever its size.
This tax will never touch an individual mover directly. Its relevance is different. It shows that the region's rates now respond to pressures no Gulf government fully controls. A low rate that other countries could override was converted into revenue for the state that set it. Personal income is not under the same international pressure today. The precedent is that the region adjusts when the cost of zero rises.
Fourth instrument: personal income, starting in Oman
Oman's Royal Decree 56/2025 was issued on 22 June 2025, published in Official Gazette No. 1602 on 30 June 2025, and under its Article 4 takes effect on 1 January 2028. The Tax Authority's announcement describes a law of 76 articles in 16 chapters and says its impact study found that approximately 99% of the population would not be subject to it.
What it taxes
The mechanics are in the first chapters of the law.
- Residence is a day count. A tax resident is anyone present in Oman for more than 183 days, continuous or intermittent, in the calendar tax year (Article 1). The Tax Authority's FAQ confirms that this applies to Omanis and non-Omanis alike.
- Residents are taxed on worldwide income. Article 6 taxes a resident's income earned in Oman or abroad, and a non-resident's income earned in Oman.
- The base is broad. Article 7 lists salaries and wages, self-employment, rent, royalties, interest, dividends and gains on shares, gains on real estate, pensions and end-of-service payments, prizes, grants and gifts, and board fees. The FAQ adds that residential rent is taxable even though it is exempt from VAT.
- The rate is 5% of taxable income (Article 8).
- The threshold works as an allowance. The law defines net income as the amount by which gross income exceeds OMR 42,000. Taxable income is net income after exemptions, costs and losses.
On those definitions, before any exemption or cost, someone with OMR 50,000 of gross income would have OMR 8,000 of net income and owe OMR 400. At OMR 100,000 the figure would be OMR 2,900, an average rate below 3%. The figures apply the statutory formula only; the regulations that settle the detail have not been issued.
The exemptions that matter to movers
Article 25 contains a long list. Several deserve attention from anyone weighing Oman:
- An 18-month window for newcomers. A resident's income earned outside Oman is exempt for 18 months, starting the day after the person stops being a non-resident, once only.
- Omani nationals only: salaries earned by an Omani tax resident from work outside Oman are exempt. Foreign residents do not get this.
- Family costs: amounts equal to education and healthcare spending for the taxpayer, spouse, parents, children and dependants, under controls the regulations are to set.
- Home sales: gains on the main residence are exempt if it is sold at least two years after the Tax Authority was notified of the choice; a secondary home qualifies once in a lifetime.
- Family transfers: inheritance, bequests and gifts between spouses or first-degree relatives are exempt.
- Omani government sukuk and bonds: distributions, interest and gains are exempt.
- Zakat and donations to approved bodies, up to 5% of gross income, and pension contributions to up to two schemes.
The filing and exit rules
Anyone whose gross income exceeds OMR 42,000 must file an electronic return within six months of the end of the year (Article 33). A resident who has filed cannot simply stop: filing ends only after income falls below the threshold for a tax year, with notice to the Authority (Article 34). And a resident whose residence in Oman is ending must file at least 60 days before departure, unless the departure is sudden and outside their control (Article 37). Foreign tax can be credited against Omani tax, but only up to the Omani amount and without carry-forward (Article 32).
The regulations that have not arrived
Article 2 of the decree required the Chairman of the Tax Authority to issue the executive regulations within one year of publication in the Official Gazette. Publication was 30 June 2025, so the deadline fell at the end of June 2026.
By 7 October 2026 they had not appeared. The Tax Authority's law and regulations page for PIT lists one document, Royal Decree 56/2025. The Official Gazette issues from mid-May to No. 1668 of 4 October 2026 carry several Tax Authority decisions, including amendments to the executive regulations of the existing Income Tax Law and the VAT Law and new zero-rate lists, but no regulation under the personal income tax law.
That gap matters for one practical reason. The law sets the frame; the regulations set the procedure. Article 5 leaves the procedures, deadlines, documents and forms, the treatment of costs and the calculation of losses to the regulations, and Article 25 leaves the controls for the education, healthcare and mortgage interest exemptions to them as well. Until they exist, nobody can model those items precisely. The start date of 1 January 2028 is in the decree itself and has not been changed.
What the pattern says
Put the four steps side by side and a pattern emerges. Each new tax started narrow, low and with a high threshold: VAT at 5%, corporate tax at 9% above AED 375,000 with individuals' wages and investments carved out, the minimum tax only for groups above EUR 750 million, Oman's income tax at 5% above OMR 42,000 with a long list of exemptions. Each time, the machinery was built first.
The Saudi VAT shows the second half of the pattern. Once the machinery existed, the rate moved fast when the budget needed it.
None of this predicts what the UAE, Saudi Arabia, Qatar, Kuwait or Bahrain will do with personal income. It does show that the barrier to a personal income tax in the Gulf is political and fiscal, not legal. Oman has now built the definitions, the residence test, the withholding duty for employers and the filing system. Any neighbour that wants to follow has a template written in the region.
What a mover should actually weigh
For someone choosing a Gulf base, the useful response is not alarm. It is to price the zero the way any other variable is priced.
- Threshold, not rate. Oman's rate is low; the question is how far above OMR 42,000 your income sits, and which of it falls into exempt categories. For most salaried residents the answer is still zero.
- The residence test. More than 183 days in a calendar year makes you resident, with worldwide income in scope. Days are the variable you control, and they are the one you will have to prove. The Brief's piece on the paper trail that saves you covers how.
- Who is in scope. Oman taxes pensions, rental income and investment gains, not just salaries. A retiree with a large pension and a portfolio is more exposed than an employee on a mid-range salary.
- Timing. The 18-month exemption for foreign income applies once, from the day after non-resident status ends. The law contains no transitional rule for people who were already resident before 1 January 2028, so the date of arrival deserves a precise answer before it is fixed.
- The exit filing. A 60-day pre-departure return is a commitment to plan a departure, not just an arrival.
- The home country. A zero abroad only helps if your old country has let you go. The Brief's low-tax shortlist for 2026 and its list of countries that do not tax foreign income set out the alternatives, and the Oman country page covers the wider system.
The Gulf remains, for most individuals, one of the lowest-tax regions in the world, and Oman's tax as written is modest. But the word "tax-free" has always been a description of current policy. Since 2018 the region has shown, instrument by instrument, that the policy can change. A plan that only works at zero is a bet on that policy staying put. A plan that still works at 5%, with the days counted and the documents kept, does not depend on the bet.
Work with Sebastian
If you are weighing a move to the Gulf and want residence, home-country exit and future tax exposure planned together rather than assumed, that is the kind of cross-border setup Sebastian works on with internationally mobile clients. Book a consultation.
