Part 3 - Chargeability to Tax
Chapter 2 - Rules for Deduction from the Gross Income
Section 2 - Restrictions on Deducting Certain Categories of Expenses
Article 61
[GTL Notes: Deductibility of Interest on Loans]
In determining the taxable income for any tax year, interest on loans may be deducted in accordance with the rules specified in the Executive Regulation of this Law, in the following cases:
Interest allocated by the establishment to its owner or to the account of another person controlled by its owner pursuant to the Articles 132 and 133 of this Law;
Interest payable by any Omani company other than banks and insurance companies;
Interest allocated by a permanent establishment to its head office or to the account of another person controlled by the owner of the permanent establishment pursuant to the Articles 132 and 133 of this Law.
For the purposes of this Article, the term loan means any kind of loan, advance or financial arrangement or financial facility entered into between a taxpayer and any other person where one controls the other or both of them are controlled by another person pursuant to Articles 132 and 133 of this Law, but does not include any amounts payable against the supply of goods or rendering of services in the ordinary course of business of the taxpayer, as long as no interests are payable on them.
The term "interests" means any payments, howsoever described, made in respect of a loan which is not a repayment of principal.