Jordan Income Tax Law ..at a glance
Bibi Consulting
Main Changes :
- Tax rate for banks and financial companies remains at 35%.
- Tax rate for insurance companies reduced to 25%.
- Top tax rate for individuals reduced to 25%.
- Dividend tax is abolished.
- Introduction of 2% withholding tax on payments made to resident professionals.
Note : This page needs to be updated to reflect the latest tax changes which are not yet ratified.
To view a full text of the current law in English ,please visit the Jordanian Income Tax Department's website at:http://www.incometax.gov.jo/incometax/en_main%20menue/en_legislations/tax_law.aspx

To read a draft of the proposed law in Arabic,please click here.


The Law

The Tax Law in force is Law no. 57 of 1985 as amended. The latest amendement was made through Law no.25 of 2001 which became in effect on January 1,2002.
Who Should File

Each individual or company receiving taxable income from a Jordanian source should file a tax return four months after the end of the taxpayer's fiscal year. Failure to do so will trigger a delay fine at 2% per month but not exceeding 24%. A delay fine at 1.5% per month is imposed in case the due tax is not paid on time.
Accounting Records

Accounting records should be kept in Arabic,but in practice records kept in English are accepted.
The financial statements should be prepared in conformity with International Accounting Standards.
Certain taxpayers are required to file audited financial statements with their tax returns.This usually applies to corporations.
Corporate Tax Rates

The general tax rate is 25% with the following exceptions :

Activity                                             Rate

Manufacturing                                 15%
Hotels and Hospitals                      15%
Metallurgy                                        15%
Transportation                                 15%
Construction                                    15%
Banks & financial companies        35%


Individual Tax Rates

Individual taxpayers receive certain deductions and exemptions based on their marital status and whether employed by the Government or the private sector. The following tax rates apply :

First JD   2,000                                 5%
Next JD   4,000                               10%
Next JD   8,000                               20%
Over JD 14,000                              25%
Capital Gains.

In general capital gains are tax exempt. 25% of capital gains arising from trading in shares and bonds and mutual funds dividends are tax exempt when the recipient is a bank or a financial institute.
Withholding Tax

Payments made to non-resident companies or individuals for services provided or deemed to be provided in Jordan are subject to withholding tax at 10%. Foreign companies or individuals are not required to file a tax return in Jordan if the tax is withheld by the payee.

Payments made to resident professionals such as accountants, auditors,engineers,consultants,physicians and payments made for royalties and intellectual properties are subject to a 2% withholding tax.
The above tax is considered to be a payment on account of the tax due from the recipient of the payments.
Tax Treaties

Jordan has signed tax treaties with the following countries :

- Canada
- France
- Romania
- Turkey
- Poland
- Malaysia
- Indonesia
- India
- Egypt
- Tunisia
- Algeria

Jordan is also negotiating other treaties with a number of countries.