Peer Review of the Automatic Exchange of Financial Account Information 2024 Update

Oman

This report analyses the implementation of the AEOI Standard in Oman with respect to the requirements of the AEOI Terms of Reference. It assesses both the legal frameworks put in place to implement the AEOI Standard and the effectiveness of the implementation of the AEOI Standard in practice.

The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.

Overall findings

AEOI legal framework

Oman’s legal framework implementing the AEOI Standard is in place and is fully consistent with the requirements of the AEOI Terms of Reference. This includes Oman’s domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) and its international legal framework to exchange the information with all of Oman’s Interested Appropriate Partners (CR2).

Overall determination on the legal framework: In Place

Effectiveness of AEOI in practice

Oman’s implementation of the AEOI Standard is partially compliant with the requirements of the AEOI Terms of Reference to ensure the effectiveness of the AEOI Standard in practice. This is because there are significant issues with respect to ensuring that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures (CR1) and with respect to exchanging the information in an effective and timely manner (CR2).

Overall rating in relation to the effectiveness in practice: Partially Compliant

General context

Oman commenced exchanges under the AEOI Standard on a non-reciprocal basis in 2020 (i.e. it sends but does not receive information).

In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Oman:

• amended the Income Tax Law 28/2009; and

• issued the Chairman of the Tax Authority Decision No. 78/2020 On Standards for Automatic Exchange of Financial Account Information.

Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 1 July 2019. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete the due diligence procedures on High-Value Individual Accounts by 31 December 2019 and on Preexisting Lower Value Individual Accounts and Entity Accounts by 31 December 2020.

Following the initial Global Forum review, Oman amended its legislative framework to address issues identified, effective from 29 April 2024.

With respect to the exchange of the information under the AEOI Standard, Oman is a Party to the Convention on Mutual Administrative Assistance in Tax Matters and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2020.

Table 1 sets out the number of Financial Institutions in Oman that reported information on Financial Accounts in 2023 as defined in the AEOI Standard (essentially because they maintained Financial Accounts for Account Holders, or that related to Controlling Persons, resident in a Reportable Jurisdiction). It also sets out the number of Financial Accounts that they reported in 2023. In this regard, it should be noted that Oman requires the reporting of Financial Accounts based on a prescribed list of exchange partners and some accounts may be required to be reported more than once (e.g. jointly held accounts or accounts with multiple related Controlling Persons), which is reflected in the figures below. These figures provide key contextual information to the development and implementation of Oman’s administrative compliance strategy, which is analysed in the subsequent sections of this report.

Table.4. Number of Financial Institutions reporting and Financial Accounts reported

	Number
Number of Financial Institutions reporting Financial Accounts in 2023	32
Number of Financial Accounts reported in 2023	28,254

Table 2 sets out the number of exchange partners to which information was successfully sent by Oman in the past few years (including where the necessary frameworks were in place, containing an obligation on Reporting Financial Institutions to report information, but no relevant Reportable Accounts were identified). These figures provide key contextual information in relation to Oman’s exchanges in practice, which is also analysed in subsequent sections of this report.

Table.5. Number of exchange partners to which information was successfully sent

 

	2020	2021	2022	2023
Number of exchange partners to which information was successfully sent	28	28	39	35

In order to provide for the effective implementation of the AEOI Standard, in Oman:

• the Oman Tax Authority (OTA), as the Competent Authority for AEOI purposes, has responsibility for ensuring the effective implementation of the due diligence and reporting obligations by Reporting Financial Institutions that are not supervised by certain other regulatory authorities, for taking enforcement action in respect of non-compliance with the AEOI, and for exchanging the information with Oman’s exchange partners. The other regulatory authorities responsible for the effective implementation of the AEOI by Reporting Financial Institutions under their supervision are the Central Bank of Oman (CBO, the authority responsible for the supervision of banks, finance and leasing companies and money exchange companies, and also performs AML supervisory functions in these sectors) and the Financial Services Authority (FSA, the authority responsible for the supervision of the capital market and the insurance sector, and also performs AML supervisory functions in the two sectors);

• technical solutions necessary to receive and validate the information reported by Reporting Financial Institutions were put in place by establishing a secure platform for reporting that includes a validation system; and

• the Common Transmission System (CTS) is used for the exchange of the information, along with the associated file preparation and encryption requirements.

It should be noted that the review of Oman’s legal frameworks implementing the AEOI Standard concluded with the determination that Oman’s domestic legal framework is In Place and its international legal framework is In Place. This has been taken into account when reviewing the effectiveness of Oman’s implementation of the AEOI Standard in practice.

Findings and conclusions on the legal frameworks

The detailed findings and conclusions on the AEOI legal frameworks for Oman are below, organised per Core Requirement (CR) and then per sub-requirement (SR) as extracted from the AEOI Terms of Reference (see Annex B).

CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.

Determination: In Place

Oman’s domestic legislative framework is in place and contains all of the key aspects of the CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (SRs 1.1 – 1.3). It also provides for a framework to enforce the requirements (SR 1.4).

SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.

Oman has defined the scope of Reporting Financial Institutions in its domestic legislative framework in accordance with the CRS and its Commentary.

Recommendations:

No recommendations made.

SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.

Oman has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and incorporated the due diligence procedures that must be applied to identify them in accordance with the CRS and its Commentary.

Recommendations:

No recommendations made.

SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.

Oman has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.

Recommendations:

No recommendations made.

SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.

Oman has a legislative framework in place to enforce the requirements in accordance with the CRS and its Commentary.

Recommendations:

No recommendations made.

CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.

Determination: In Place

Oman’s international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Oman’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Oman and that meet the required standard in relation to confidentiality and data safeguards) (SRs 2.1 – 2.3).

SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.

Oman has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.

Recommendations:

No recommendations made.

SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.

Oman put in place its exchange agreements without undue delay.

Recommendations:

No recommendations made.

SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.

Oman’s exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.

Recommendations:

No recommendations made.

Assessed jurisdiction’s comments on the assessment of its legal frameworks

No comments made.

Findings and conclusions in relation to effectiveness in practice

The detailed findings and conclusions in relation to effectiveness in practice of AEOI for Oman are below, organised per Core Requirement (CR) and then per sub-requirement (SR) as extracted from the AEOI Terms of Reference (see Annex B).

CR1 Effectiveness in practice: Jurisdictions should ensure that in practice Reporting Financial Institutions correctly implement the due diligence and reporting procedures, which includes a requirement for jurisdictions to have in place an administrative framework to ensure the effective implementation of the CRS.

Rating: Partially Compliant

Oman’s implementation of the AEOI Standard is partially compliant with respect to ensuring that Reporting Financial Institutions are correctly conducting the due diligence and reporting procedures. More specifically, there are significant issues in relation to Oman ensuring effectiveness in a domestic context, such as through having an effective administrative compliance framework and related procedures (SR 1.5), and collaborating with exchange partners to ensure effectiveness (SR 1.6). Oman should continue its implementation process to ensure its effectiveness, including by addressing the recommendations made.

SR 1.5 Jurisdictions should ensure that in practice Reporting Financial Institutions identify the Financial Accounts they maintain, identify the Reportable Accounts among those Financial Accounts, as well as their Account Holders, and where relevant Controlling Persons, by correctly conducting the due diligence procedures and collect and report the required information with respect to each Reportable Account. This includes having in place:

• an effective administrative compliance framework to ensure the effective implementation of, and compliance with, the CRS. This framework should:

i. be based on a strategy that facilitates compliance by Reporting Financial Institutions and which is informed by a risk assessment in respect of the effective implementation of the CRS that takes into account relevant information sources (including third party sources);

ii. include procedures to ensure that Financial Institutions correctly apply the definitions of Reporting Financial Institutions and Non-Reporting Financial Institutions;

iii. include procedures to periodically verify Reporting Financial Institutions’ compliance, conducted by authorities that have adequate powers with respect to the reviewed Reporting Financial Institutions, with procedures to access the records they maintain; and

• effective procedures to ensure that Financial Institutions, persons or intermediaries do not circumvent the due diligence and reporting procedures;

• effective enforcement mechanisms to address non-compliance by Reporting Financial Institutions;

• strong measures to ensure that valid self-certifications are always obtained for New Accounts;

• effective procedures to ensure that each, or each type of, jurisdiction-specific Non-Reporting Financial Institution and Excluded Account continue to present a low risk of being used to evade tax; and

• effective procedures to follow up with a Reporting Financial Institution when undocumented accounts are reported in order to establish the reasons why such information is being reported.

Findings:

In order to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, Oman implemented many of the requirements in accordance with expectations. However, significant issues were identified. The key findings were as follows:

• Oman has recently put in place a comprehensive strategy in relation to its administrative framework to monitor the implementation of the AEOI Standard, based on a risk assessment that takes into account a range of relevant information sources. In addition, communication and outreach activities have been carried out to help raise awareness and promote compliance amongst the Financial Institution population. This includes continuous dialogue with Financial Institutions via email, phone and the publication of relevant materials and information on the Tax Authority’s website, as well as the organisation of webinars, seminars and meetings aimed at improving Financial Institutions' understanding and implementation of compliance requirements. Oman’s strategy has been documented in its "CRS Administrative Compliance Strategy”. A formalised annual review plan has also been developed to implement the strategy, including defined procedures to review and verify compliance. Activities also appear to be underway to ensure that the interaction between Oman’s AEOI and AML frameworks always results in reporting in accordance with the AEOI Standard.

• Oman has adopted a multi-faceted approach, utilising various methods and sources of information to ensure that it has effectively identified Reporting Financial Institutions on an ongoing basis. Its starting point in determining the Reporting Financial Institution population is its mandatory CRS registration and nil reporting requirements by RFIs in relation to the AEOI Standard. Oman maintains a list of Reporting Financial Institutions, which is informed by the lists of regulated Financial Institutions maintained by the financial regulators and which will be supplemented using the list of Foreign Financial Institutions for FATCA purposes, the Oman Business Register and feedback from partner jurisdictions. Oman plans to cross-check the lists of Entities that could be Reporting Financial Institutions against the list of Entities that register as RFIs to identify Entities that may be incorrectly not registered and reporting to ensure that they have classified themselves correctly and are reporting information as required. The regulatory authorities have procedures in place to monitor and follow up on failures to report and the reasons for nil reporting by Reporting Financial Institutions. Oman intends to keep its understanding of the Financial Institution population up to date on a routine basis.

• The institutions responsible for implementing Oman’s compliance strategy appear to have the necessary powers to discharge their functions, although this has not yet been fully tested in practice. With respect to resourcing, the Oman Tax Authority and each of the regulatory authorities have assigned the equivalent of 1-2 full time staff with specified skills and experience to monitor and ensure compliance by Reporting Financial Institutions, which have access to IT systems and tools to conduct risk assessments. Furthermore, the CBO includes some AEOI queries in its AML supervision activities with respect to the Entities it oversees, and there is a formalised arrangement to plan, manage or assess the impact of the activities in the context of the AEOI Standard. Furthermore, based on the risk assessment process and overarching compliance plan developed, the resources allocated appear to be sufficient to ensure the effectiveness of the AEOI Standard.

• It appears that the regulatory authorities have procedures in place to effectively enforce the requirements for regulated Financial Institutions, such as conducting desk-based reviews and onsite reviews, including through the inspection of records of Reporting Financial Institutions and the application of dissuasive penalties or sanctions. In addition to some verification activities carried out on an ad hoc basis, the Omani regulatory authorities plan to verify the full range of due diligence requirements by Reporting Financial Institutions under their respective supervision from 2024. As part of Oman’s CRS Administrative Compliance Strategy, clearly defined procedures are in place to ensure that self-certifications are obtained as required.

• It appears that Oman is ready to take effective action to address circumvention of the requirements if such circumvention is detected, although it is only at an initial stage of implementation.

• Oman appears to have clearly defined procedures to follow up with Reporting Financial Institutions when undocumented accounts are reported, although it is at an early stage of implementation.

• It is noted that Oman does not have a jurisdiction-specific list of Non-Reporting Financial Institutions or Excluded Accounts for ongoing monitoring.

Table 3 provides a summary of the specific activities undertaken, or that are planned to be undertaken, in relation to each of the key parts of the framework described above.

Table.6. Activities undertaken

 

Activity type	Activities undertaken
Communication and outreach	Oman has carried out communication and outreach activities, including continuous dialogue with Financial Institutions via email, phone and the publication of relevant materials and information on the Tax Administration’s website, as well as the organisation of webinars, seminars and meetings aimed at improving Financial Institutions' understanding and implementation of the requirements.
Verifying that Financial Institutions are reporting as required	Oman introduced mandatory registration and nil reporting requirements for Reporting Financial Institutions. Oman has also carried out some ad hoc verification activities to ensure that Financial Institutions are reporting as required, including following up with Entities that may be incorrectly not reporting and automated reminders generated through the reporting system. Oman intends to cross-check its list of registered RFIs against the lists of regulated Entities held by other relevant regulatory bodies and the FATCA FFI list. Oman has procedures and plans in place to conduct comprehensive verification activities to ensure that Financial Institutions are reporting as required.
Verifying whether the information reported is complete and accurate	Oman has conducted a desk-based analysis to verify whether the information being reported is complete and accurate, although it is unclear what this analysis consisted of. The CBO has added AEOI queries to its AML checks in relation to the Entities it oversees, and this has recently been formalised. Oman has not yet conducted in-depth audits, but has plans to do so in the near future. It has accordingly not yet identified any issues.
Enforcement	Following the activities mentioned above, Oman has not yet imposed penalties and sanctions but there are clearly defined procedures and plans to do so in the near future.

Oman was not able to confirm that it collects and monitors information on the proportion of Financial Accounts that are reported that include information on the Tax Identification Numbers and dates of birth with respect to the individuals associated with them. These data points are key to exchange partners to effectively utilise the information and are important to developing an effective compliance strategy to ensure the AEOI Standard is being effectively implemented. Oman was not able to confirm that it correctly collects and monitors information on the number of undocumented accounts reported by its Reporting Financial Institutions. This information is crucial to implementing the requirement to follow up on undocumented accounts.

Feedback was also received from Oman’s exchange partners indicating that, compared to what they generally experience in relation to the information received from all of their exchange partners, they achieved a relatively low level of success when seeking to match information received from Oman with their taxpayer database. Furthermore, seven exchange partners highlighted issues with respect to the information received such as missing TINs, names and addresses and invalid information. Follow-up discussions confirmed that Oman is aware of these issues and is seeking to improve the situation.

Based on these findings it was concluded that Oman is partially meeting expectations in ensuring that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, including by having in place the required administrative compliance framework and related procedures. More specifically, significant issues have been identified, including with respect to the implementation of its plans to carry out verification activities to identify non-compliance by Reporting Financial Institutions and the implementation of an effective enforcement framework to address such non-compliance. Oman should therefore continue its implementation process accordingly, including by addressing the recommendations made.

Recommendations:

Oman should implement its plan to monitor and verify compliance and commence its verification activities to ensure that the information reported is complete and accurate, including appropriate verification activities to identify non-compliance in key areas, such as whether Reporting Financial Institutions are obtaining valid self-certifications as required.

Oman should implement its plan to enforce the requirements, including the application of penalties where appropriate.

Oman should implement its plan to follow up with all Reporting Financial Institutions reporting undocumented accounts, including to understand the reasons for it and to ensure that they are correctly applying the definition.

Oman should implement systems to monitor the reporting of Tax Identification Numbers and dates of birth by Reporting Financial Institutions to inform its compliance strategy.

Oman should address the issues raised by its exchange partners.

SR 1.6 Jurisdictions should collaborate on compliance and enforcement. This requires jurisdictions to:

c) use all appropriate measures available under the jurisdiction’s domestic law to address errors or non-compliance notified to the jurisdiction by an exchange partner; and

d) have in place effective procedures to notify an exchange partner of errors that may have led to incomplete or incorrect information reporting or non-compliance with the due diligence or reporting procedures by a Reporting Financial Institution in the jurisdiction of the exchange partner.

It should be noted that, as Oman exchanged information on a non-reciprocal basis and did not therefore receive information, it was not required to have in place procedures to notify its exchange partners. SR 1.6 b) has therefore not been assessed in this case.

Findings:

In terms of cooperation on compliance and enforcement, it appears that Oman has not implemented all of the requirements in relation to issues notified to them (i.e. under Section 4 of the MCAA or equivalent) as expected. In particular, Oman received two notifications from its partners in 2023, indicating issues of missing/invalid TINs and DoBs, which it is still in the process of investigating and subsequently providing responses to the partners, due to the ongoing process of rebuilding and upgrading to a new AEOI system in Oman and the inability to access and process the necessary data. There is still no assurance that effective implementation will be ensured.

Based on these findings it was concluded that Oman is fully meeting expectations in relation to collaborating with its exchange partners to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures. Oman is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.

Recommendations:

Oman should implement its documented procedures and take all appropriate measures to address errors or non-compliance notified by an exchange partner.

CR2 Effectiveness in practice: Jurisdictions should exchange the information effectively in practice, in a timely manner, including by sorting, preparing, validating and transmitting it in accordance with the AEOI Standard.

Rating: Partially Compliant

Oman’s implementation of the AEOI Standard is partially compliant with respect to exchanging the information effectively in practice and in a timely manner. More specifically, while Oman appears to be meeting expectations with respect to providing corrections, amendments or additions (SR 2.9), there are significant issues with respect to Oman sorting, preparing and validating the information (SR 2.4) and correctly transmitting the information and in a timely manner (SR.s 2.5 – 2.8). Oman should continue its implementation process to ensure its effectiveness, including by addressing the recommendations made.

SR 2.4 Jurisdictions should sort, prepare and validate the information in accordance with the CRS XML Schema and the associated requirements in the CRS XML Schema User Guide and the File Error and Correction-related validations in the Status Message User Guide (i.e. the 50000 and 80000 range).

Findings:

Feedback from Oman’s exchange partners did not raise any specific concerns with respect to their ability to process the information received from Oman and therefore with respect to Oman’s implementation of these requirements. More generally, three (or 4.8%) of Oman’s exchange partners reported rejecting 50% or more of the files received, due to the technical requirements not being met. This is partially in line with the general experience of other jurisdictions, and the number of files from Oman that were rejected has reduced over time. It was noted that Oman is working to resolve the issues raised, has contacted some of the partners and will contact the remaining ones. Many of the issues are still to be addressed.

Figure.1. Technical issues raised by Oman’s exchange partners

Based on these findings it was concluded that Oman is partially meeting expectations in relation to sorting, preparing and validating the information. However, some issues have been identified, including with respect to working with exchange partners to address the issues raised. Oman should therefore continue its implementation process accordingly, including by addressing the recommendations made.

Recommendations:

Oman should review its systems and procedures to sort, prepare and validate the information to ensure they meet the requirements of the AEOI Standard.

Oman should continue to work with its exchange partners to address the issues raised.

SR 2.5 Jurisdictions should agree and use, with each exchange partner, transmission methods that meet appropriate minimum standards to ensure the confidentiality and integrity of the data throughout the transmission, including its encryption to a minimum secure standard.

Findings:

In order to put in place an agreed transmission method that meets appropriate minimum standards in confidentiality, integrity of the data and encryption for use with each of its exchange partners, Oman linked to the Common Transmission System.

Based on these findings it was concluded that Oman is fully meeting expectations in relation to agreeing and using appropriate transmission methods with each of its partners. Oman is encouraged to continue to ensure the ongoing effectiveness of its implementation.

Recommendations:

No recommendations made.

SR 2.6 Jurisdictions should carry out all exchanges annually within nine months of the end of the calendar year to which the information relates.

Findings:

Two exchange partners highlighted delays in the sending of information by Oman (representing 3.2% of its partners). This represents a relatively high proportion of exchange partners, although the overall timeliness of the exchanges by Oman has improved over time. Furthermore, all these partners stated that the information has still not been received.

Based on these findings it was concluded that Oman is partially meeting expectations in relation to exchanging the information in a timely manner. More specifically, significant issues have been identified, including with respect to sending information on time. Oman should continue its implementation process to ensure its effectiveness, including by addressing the recommendation made.

Recommendations:

Oman should ensure it sends information to all of its exchange partners in a timely manner.

SR 2.7 Jurisdictions should send the information in accordance with the agreed transmission methods and encryption standards.

Findings:

Feedback from Oman’s exchange partners did not raise any concerns with respect to Oman’s use of the agreed transmission methods and therefore with Oman’s implementation of this requirement.

Based on these findings it was concluded that Oman is fully meeting expectations in relation to sending the information in accordance with the agreed transmission methods and encryption standards. Oman is encouraged to continue to ensure the ongoing effectiveness of its implementation.

Recommendations:

No recommendations made.

SR 2.8 Jurisdictions should have the systems in place to receive information and, once it has been received, should send a status message to the sending jurisdictions in accordance with the CRS Status Message XML Schema and the related User Guide.

Findings:

It should be noted that, as Oman exchanged information on a non-reciprocal basis and did not receive information, it was not required to have in place systems to receive the information and provide status messages. SR 2.8 has therefore not been assessed in this case.

Recommendations:

No recommendations made.

SR 2.9 Jurisdictions should respond to a notification from an exchange partner as referred to in Section 4 of the Model CAA (which may include Status Messages) in accordance with the timelines set out in the Commentary to Section 4 of the Model CAA. In all other cases, jurisdictions should send corrected, amended or additional information received from a Reporting Financial Institution as soon as possible after it has been received.

Findings:

While Oman has procedures in place to address notifications received from partners, to date it has not yet resolved two notifications received from its exchange partners in 2023 due to the ongoing process of rebuilding and upgrading to a new AEOI system in Oman and the inability to access and process the necessary data, although Oman stated that it provides updates to exchange partners every 90 days. It therefore appears that Oman’s approach does not ensure that corrected, amended or additional information is provided in a timely manner.

Based on these findings it was concluded that Oman is not meeting expectations in relation to responding to notifications from exchange partners and the sending of corrected, amended or additional information. Oman is encouraged to continue to ensure the ongoing effectiveness of its implementation, including by addressing the recommendation made.

Recommendations:

Oman should implement procedures to effectively respond to partners when they notify Oman of errors or suspected non-compliance by its Reporting Financial Institutions.

Assessed jurisdiction’s comments on the assessment of effectiveness in practice

No comments made.