Jordan Tax Rates
Jordan individual income tax rates are progressive up to 14%.
7% for each Dinar of the first 12,000 Dinar
14% on each Dinar over
Basis - Resident and nonresident individuals are taxed only on income sourced in Jordan.
Residence - An individual present in Jordan for 183 days or more in a calendar year is treated as a resident for tax purposes.
Tax Filing status - Joint assessment of spouses may be requested.
Taxable income - Income from employment in Jordan is taxable.
Capital gains - Jordan does not tax capital gains.
Tax Deductions - the following exemptions shall be deducted from the gross income of a physical resident person:
- 12,000 Dinar for the taxpayer
- 12,000 Dinar for the dependants regardless of their number.
In cases of submitting joint or separate tax declarations, the exemption amount granted to a single family shall not exceed 24,000 Dinar.
A Jordanian non-resident physical person can benefit from the exemption of the dependants residing in Jordan if he is responsible for their support.
Capital duty - No
Stamp duty - No
Capital acquisitions tax - No
Real property tax - A property tax is levied at a rate of 14% of the estimated annual rental value.
Inheritance/estate tax - No
Net wealth/net worth tax - No
Social security - The employee contribution is 5.5%, which is withheld and reported by the employer on a monthly basis.
Jordan Corporate Tax Rates
Jordan Company tax is levied between 14-30%, as follows:
- 14% for all legal persons except activities mentioned below (previously 15%)
- 24% on main communication companies, financial companies (including exchange companies), and financial intermediation companies, insurance companies, and legal persons carrying out financial lease businesses. (previously 25%)
- 30% on banks (previously 35%)
Residence - Jordanian tax law does not define residence for tax purposes, but a company that is registered in Jordan is deemed to be resident.
Basis - Resident companies are taxable on income sourced in Jordan.
Taxable income - Income derived from Jordan and or from Jordanian sources is taxable.
Taxation of dividends - Jordan does not tax dividends.
Capital gains - Jordan does not tax capital gains.
Losses - Losses may be carried forward indefinitely. The carryback of losses is not permitted.
Rate - The tax rate is 14%, with a 30% rate for banks. A 24% rate applies to primary telecommunications companies, insurance companies, financial brokerage companies and financial institutions, including money exchange companies and juristic persons conducting financial lease activities.
Surtax - No
Alternative minimum tax - No
Foreign tax credit - No
Participation exemption - No
Holding company regime - No
Tax Incentives - The Investment Promotion Law provides up to a 75% exemption for 10 years for certain sectors.
Withholding tax:
Dividends - Jordan does not tax dividends.
Interest - Interest paid to a nonresident is subject to a 7% withholding tax unless the rate is reduced under a tax treaty.
Royalties - Royalties paid to a nonresident are subject to a 7% withholding tax unless the rate is reduced under a tax treaty.
Branch remittance tax - No
Other taxes on corporations:
Capital duty - No
Payroll tax - Payroll tax is withheld by the employer from monthly compensation at progressive rates ranging from 7% to 14%.
Real property tax - A property tax is levied at a rate of 14% of the estimated annual rental value.
Social security - Employers contribute 11% of an employee's salary and the employee contributes 5.5%. The employer is required to withhold and report contributions on a monthly basis.
Stamp duty - An ad valorem stamp duty of 0.3% is levied on certain documents.
Transfer tax - No
Other - A 1% University Fee is payable on net income before tax of public shareholding companies and foreign operating companies until 31 December 2010.
Anti-avoidance rules:
Transfer pricing - No
Thin capitalisation - No
Controlled foreign companies - No
Disclosure requirements - No
Tax year - Tax year in Jordan is calendar year
Consolidated returns - Consolidated returns are not permitted; each company must file its own return.
Tax Filing requirements - Companies must file a tax return within 4 months of the end of the accounting period, and tax is payable with the return. In certain cases, tax may be paid by instalment.
Tax Penalties - Late payment fees are imposed at 0.4% for each week of delay. A JD 500 penalty applies for late filing by public shareholding companies and private shareholding companies. If the income tax due as declared in the return is less than the actual amount due, shortage fees ranging from 15% to 80% of the difference will be imposed.
Jordan Sales Tax / Value Added Tax
The standard rate of VAT in Jordan is 16%, with a higher rate applying to certain luxury items. Exemptions include some basic foodstuffs, fertilizers, crops, fruit, seeds, books and newspapers.
Sales tax is levied on the sale of goods, transfer of right to use goods, lease transactions and also transfer of materials in execution of works are considered as deemed sales and are liable to sales tax. In this regard, 'goods' refer to movable property and even include intangible property such as copyright, trademark, patents etc.
The sales tax is levied on inter-state as well as intra-state sales. The inter-state sales tax collected by the Central Government is known as central sales tax (CST) and intra-state tax collected by respective state governments is known as local sales tax (LST). Varying rates of sales tax are prescribed on different products. Most of the states levy sales tax at the first point of sales in the state. Consequently, subsequent sale of goods within the state are exempt from tax. The rate of sales tax is either 4% or 16%. State government initiative to promote industrial growth provides sales tax exemption, deferred payment facilities and sales tax set off.
Export sales and trading within a qualified Free Zone are sales tax exempted transactions in Jordan.
VAT Registration - Businesses with an annual taxable turnover of more than JOD 30,000 must register for sales tax purposes.
Filing and VAT payment - A sales tax return must be filed every 2 months, with tax due paid at that time.
14%
14-30%
16%
Jordan
Income Tax Rate
Jordan
Corporate Tax Rate
Jordan
Sales Tax / VAT Rate
Last Update: Nov 2010
(This page may show previous year's tax rates. Always check last update time)
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