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May 15, 2026

Article 76 bis 6 ensures that the tax treatment of credit risk is consistent across the Omani banking sector. It mandates that provisions for 'credit losses' created by licensed Islamic banks shall be treated in the same manner as 'loan loss provisions' for conventional banks under Article 66. This allows Islamic banks to deduct their credit loss provisions from taxable income up to the limits recommended by the Central Bank of Oman. This provision maintains a level playing field for both banking models regarding the fiscal recognition of credit risk and regulatory provisioning.

Part 3 - Chargeability to Tax

Chapter 2 bis - Provisions Concerning the Determination of Taxable Income for Parties in Financial Islamic Transactions

Section 2 - Rules Pertaining to Certain Types of Income and Expenses

Article 76 bis 6

[GTL Notes: Islamic Banking Credit Loss Provisions]

When determining the taxable income in compliance with the provisions of this chapter, provisions for credit losses created by the bank licensed to carry on Islamic banking business shall be treated according to the treatment prescribed for provisions of loan losses in Article 66 of this Law.