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CONTENTS Jordan  Economic AnalysisLegal Information Info-Prod Country Guide  



The Jordanian tax law is the Income Tax Law, No. 57 of 1985. Several amendments have been issued since then by the tax authorities. The latest amendment adopted is Amending Law, No. 14 of 1995, and new tax adjustments contained therein came into effect in 1996.

Taxpayers may determine their own fiscal year. Tax returns are to be filed with the Tax Department within four months after the end of the fiscal year. Taxpayers who pay their tax liability within the first month following the close of their fiscal year are entitled to a 6 percent discount on their taxes due. Similarly, a 4 percent discount and 2 percent discount are available to taxpayers who pay their taxes during the second or third month, respectively, after the close of their fiscal year. In case of late filing of a tax return, a fine of 2 percent per month, but not exceeding 24 percent overall, will be imposed. A fine of 1.5 percent per month is imposed on taxpayers who fail to pay their taxes.

Income Taxes

The primary types of income taxes levied are corporate income tax, individual income tax, withholding tax and distribution tax. The Income Tax Law of 1985 was recently amended to include provisions of particular benefit for investors. This amendment, which came into effect in 1996, allows higher allowances for individual taxpayers and lower tax rates for individuals.

Taxation of Companies and Businesses

All companies, local and foreign, operating in Jordan are subject to corporate income tax at the following rates:



Mining, industry, hotels, hospitals, transportation, contracting and other sectors approved by the Council of Ministers



Banks, financial and finance companies, exchange companies and brokerage companies (in case of banks, financial and insurance companies, the tax payable each year should not be less than 25% of their net income before any distributions are made)






All other companies



Taxation of Individuals

Salaries, wages and other income paid to Jordanian and foreign employees are taxable. The Income Tax Law gives a 50 percent exemption from tax on private sector employees' annual salaries up to JD 12,000 and a 25 percent exemption on amounts above JD 12,000. Foreign employees working for non-Jordanian companies are exempt from paying all income tax. In addition, there are personal and family exemptions given by the Income Tax Law. In the public sector, 50 percent of the salaries and wages of employees are tax exempt.

The taxable income of an individual, not exempted as stated above, is subject to the following tax rates:

Annual Taxable Income



First JD 2,000



Next JD 2,000



Next JD 4,000



Next JD 4,000



Next JD 4,000



Withholding Tax

Ten percent of any payment made by a Jordanian resident to a non-resident should be withheld as payment on account of the tax due and should be forwarded by the Jordanian resident payer to the tax authorities within thirty days from the date it was withheld.

Every employer who pays salaries, wages, allowances or bonuses to employees must deduct from such payments the tax due and forward it to the tax authorities on a monthly basis.

Distribution Tax

This tax is levied on the distribution of company profits (i.e., dividends) and amounts to 10 percent of the dividends paid out. This tax is required to be deducted and forwarded by the entity distributing the dividends to the Tax Department within thirty days from the date of such distribution. For purposes of this tax, profits transferred abroad by a foreign company operating in Jordan shall be considered as distributed profits.

Taxable Income

According to law, income arising or deemed to be arising in Jordan shall be subject to tax. In order to determine a taxpayer's taxable income, all expenses wholly and exclusively made or incurred in the production of income during the year shall be deducted.

Company expenditures on training, marketing, research and development are tax exempt. Profits from the export of goods and services are totally exempted, with the exception of exports of phosphate, potash, fertilizers and other exports that are governed by trade protocols.


The following items are not deductible under Jordanian tax law:

  • Revenues and provisions;

  • Capital losses (for non-depreciable assets);
  • Capital expenditures;
  • Head Office expenses for foreign branches in excess of 5 percent of the taxable income of the branch in Jordan;
  • Losses or expenses recoverable under an insurance policy or a compensation contract;
  • Amounts paid as income tax and social services tax;
  • Depreciation expenses in excess of the permissible rates.
  • Loss Carry Forward

    Losses realized in a particular tax year may be carried forward in order to be deducted from taxable income during the next six consecutive tax years. Losses may be not carried backward and applied to a previous tax year's taxable income.

    Depreciation on Fixed Assets

    Fixed assets can be depreciated following an accelerated depreciation method.

    Other Tax Exemptions

    According to the Investment Law of 1995, projects approved under that law and established in the Hashemite Kingdom of Jordan are entitled to tax exemptions. The new law offers incentives for investors in the form of tax exemptions which are weighted in favor of less developed areas. Projects in Zone A receive a 25 percent deduction; projects in Zone B receive a 50 percent deduction; and projects in Zone C receive a 75 percent deduction in accordance with the following stipulations:

    • For hotels to benefit from the incentives granted by this law, they must be classified as more than three stars in Zone A;
    • The shores of the Dead Sea, within a five kilometers depth from the coastline, are classified as Zone A for hotel projects.
    • All areas of Jordan are classified as Zone C for the sectors of agriculture, animal resources and maritime transport and railways;

    Other Taxes

    Social Service Tax

    A social service tax is due from each individual and equals 10 percent of the taxpayer's income.

    Universities Tax

    This tax is payable by shareholding and foreign companies at a rate of 1 percent of net income before taxes and distributions.

    Sales Tax

    The taxpayers as defined by the Sales Tax Law are the manufacturers, merchants or service providers whose sales amount to JD 100,000 per annum and importers of any goods or services irrespective of the volume of their imports. The sales tax rate ranges from 0 percent up to 20 percent of the value of goods, and for services, the sales tax is fixed at a rate of 10 percent.

    This tax is payable when the sale is accomplished or the service is rendered. In the case of imported goods, the sales tax is payable at the customs clearance stage, before the release of such goods.

    Treaties for the Prevention of Double Taxation

    Jordan has signed agreements for the prevention of double Taxation with Austria, Bahrain, Belgium, Canada, Cyprus, Denmark, Egypt, France, Iraq, Kuwait, Libya, Malaysia, Oman, Pakistan, Qatar, Romania, Saudi Arabia, Spain, Syria, Tunisia, Turkey, United Arab Emirates, United Kingdom, the United States and Yemen.


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