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May 15, 2026

Article 66 outlines the tax treatment of loan loss provisions for banks. A bank may deduct provisions for loan losses made in the ordinary course of business. The allowable deduction is limited to the amount of provision recommended by the Central Bank of Oman (CBO) on a date nearest to the bank's balance sheet for that tax year. This ensures that the tax deduction for bad debts in the banking sector is strictly tied to the regulatory assessments of the CBO, preventing over-provisioning for the purpose of tax reduction while supporting financial stability.

Part 3 - Chargeability to Tax

Chapter 2 - Rules for Deduction from the Gross Income

Section 4 - Provisions Concerning Certain Categories of Expenses

Article 66

[GTL Notes: Deductible Loan Loss Provisions for Banks]

In determining the taxable income for any tax year for any bank, there shall be deducted the amounts of provisions for loan losses which are made by the bank to the extent of the amount of provision required to be made in accordance with the recommendation of the Central Bank of Oman on a date nearest to the bank's balance sheet date for the accounting period ending in that tax year, provided that the loan was given in the ordinary course of the banking business.