Corporate tax in Jordan


Corporate Income Tax Rate (%) 35 (a)
Capital Gains Tax Rate (%)
On Shares 24 / 35 (b)
On Depreciable Assets 35 (a)
Branch Tax Rate (%) 35 (a)
Withholding Tax (%)
Dividends 35 (a)
Interest 5 (c)
Other Payments to Nonresidents 10
Branch Remittance Tax 0
Net Operating Losses (years)
Carryback 0
Carryforward 5

a) This is the maximum rate. For a listing of rates, see Section B.

b) See Section B.

c) This withholding tax is imposed on interest paid by banks to depositors (ex­cluding interest paid on local interbank deposits). For further details, see Section B.

Taxes on corporate income and gains

Corporate income tax. In general, income tax is levied on corpo­rate entities and foreign branches with respect to taxable profit from all sources arising or deemed to arise in Jordan. Income is deemed to arise in Jordan if one of the following circumstances exists:

  • The place of performance of work is located in Jordan.
  • The place of delivery of work is located in Jordan.
  • The place of signing the contract is located in Jordan.
  • Jordanian capital is invested outside Jordan.
  • The output from a service performed outside Jordan is used in Jordan.

Rates of corporate tax. Corporate income tax in Jordan is im­posed at flat rates. Rates for resident corporations vary from 14% to 35%, depending on the type of sector. The following are the corporate income tax rates for the various sectors.

Sector Rate (%)
Banking 35
Finance, telecommunication, insurance and reinsurance, brokerage, financial leasing,
electricity generation, distribution and mining
Industrial 14
Other 20

In addition, a corporate income tax rate of 10% applies to the aggregate net income generated by Jordanian companies’ foreign branches and net income realized by residents from foreign sources, if it is generated from Jordanian monies or deposits.

Capital gains. Banks, telecommunications companies, mining companies, insurance companies, reinsurance companies, finan­cial brokerage companies, finance companies, and financial leas­ing companies are subject to tax on their capital gains realized from sales of shares, stocks, bonds, Islamic financial instruments, treasury bonds, mutual investments funds, futures contracts and options in Jordan. In addition, capital gains realized from the sale of depreciable assets are subject to the applicable corporate in­come tax rate depending on the type of activity in which the company engages.

For other companies, capital gains realized from transactions other than the sale of depreciable assets in Jordan are exempt from tax (except for goodwill). However, a formula is used to calculate the disallowed part of the relevant cost related to the exempt in­come. This formula is the ratio of exempt income to total income, multiplied by total allowable cost. Capital gains derived from sales of shares in foreign markets that arise from Jordanian funds are subject to income tax.

Administration. The tax year for corporations is their accounting (financial) year. Tax returns must be filed on a prescribed form in Arabic within four months after the tax year-end.

The tax return includes a payroll listing and information pertain­ing to goods and services supplied for the year, including details related to the corporation’s income, expenses, exemptions, and tax due.

The total amount of tax due must be paid at the time of filing to avoid penalties.

The tax authorities may conduct an income tax audit for up to four previous years and charge the company additional tax.

Taxpayers whose gross income equaled or exceeded JOD1 mil­lion in the preceding financial year are required to make an advance tax payment within 30 days following the end of the first half of the tax year and another advance tax payment within 30 days following the end of the tax year. Each advance payment is equal to 40% of the preceding year’s tax if the current year’s interim financial statements are not available.

Dividends. Dividends received from companies located in Jordan are exempt from tax except for the following:

  • Dividends received by banks from mutual investment funds, which are subject to a 35% corporate income tax rate
  • Dividends received by telecommunications companies, mining companies, insurance companies, reinsurance companies, finan­cial brokerage companies, finance companies, and financial leas­ing companies from mutual investment funds, which are subject to 24% corporate income tax rate

Twenty-five percent (subject to change) of dividend income must be added back to income if it does not exceed the total allowable costs; that is, the cap for disallowed expenses is the lower of 25% of dividends or reported costs.

Interest. Interest paid by banks to depositors, except for interest on local interbank deposits, is subject to a 5% withholding tax. The withholding tax is considered to be a payment on account for resident companies and a final tax for individuals and nonresident companies. Interest paid from Jordan to nonresident banks and non resident finance companies for deposits that are held in Jordan is not subject to withholding tax in Jordan. Any other type of interest (non-depository) paid to nonresidents is subject to a 10% withholding tax. Interest payments on loans from nonresidents are subject to withholding tax and general sales tax at 10% and 16%, respectively.

Foreign tax relief. Foreign tax relief is granted in accordance with tax treaties signed with other countries.

Determination of trading income

General. All income earned in Jordan from trading or other sourc­es, except for income exempt under the income tax law, is taxable.

Business expenses incurred to generate income are generally allowable, with limitations on certain items, such as entertainment and donations. A certain percentage of entertainment expenses is deductible. Head office charges are limited to 5% of branch net taxable income.

Provisions and reserves. Provisions and reserves are not allowed as tax deductions, except for insurance companies’ reserves and doubtful debts’ provisions for banks.

Tax depreciation. Income Tax Law No. 34 of 2014 addresses de­preciation for tangible and intangible assets. The Income Tax Department establishes statutory maximum depreciation rates for various fixed assets. If the rates used for accounting purposes are greater than the prescribed rates, the excess is disallowed but may be used for tax purposes at a later date. The following are some of the maximum straight-line depreciation rates.

Asset Rate (%)
Industrial, ordinary and temporary buildings 2 / 4 / 10
Furniture for dwelling, sleeping and work purposes, manufactured from iron, wood
and fixed plastics
Furniture for hospitals, tourist services,
hotels and restaurants
Other furniture 20
Means of transport 15
Computers, appliances, machinery used in
production and medical equipment
Other machinery and equipment 20

A taxpayer is entitled to benefit from an accelerated depreciation method up to three times the straight-line amount if the taxpayer used the accelerated-depreciation method until the asset is fully depreciated.

Machinery and equipment and other fixed assets that are import­ed on a temporary-entry basis (equipment that the government allows foreign contractors to import on a temporary basis for the purpose of carrying out certain contractual work in Jordan) do not qualify for accelerated depreciation.

Used assets are depreciated at the above statutory rates, which are applied to the purchase price.

The following are some straight-line amortization rates:

Intangible assets Rate (%)
Key franchising (in practice, money paid to
a business owner to vacate the premises so
that the payer can take over the lease)
Computer software and programs 50
Other intangible assets, such as goodwill,
trademarks and publishing rights

Relief for losses. Taxpayers can carry forward unabsorbed losses up to five years to offset profits of subsequent periods. Losses may not be carried back.

Groups of companies. The Jordanian income tax law does not con­tain any provisions for filing consolidated returns or for relieving losses within a group of companies. Companies must file separate financial statements for Jordanian tax purposes.

Other significant taxes

The following table summarizes other significant taxes.

Nature of tax Rate (%)
General sales tax (similar to value-added tax) 16
Social security contributions, on salaries and
all benefits except overtime; the maximum
salary subject to social security contributions
is JOD3,084 for individuals joining the social
security system on or after 1 March 2014; the
maximum amount is subject to change at the
beginning of each year according to the average
of social security salaries (but should not
exceed JOD3,084 in future years); different
rules regarding maximum salary apply to
individuals who joined the social security
system before 1 March 2014; the amount
of the social security contribution is based
on the employee’s January salary; the
employee’s salary is subject to revision
in January of each subsequent year; changes
to the salary made during the year are not
reflected in the employee’s social security
contribution until the following January;
contribution paid by
Employer 13.75
(This rate will increase to 14.25% for 2017.)
Employee 7.25
(This rate will increase to 7.50% for 2017.)
Withholding tax on imports; imposed on the
value of goods imported for resale; paid on
account against the taxpayer’s final tax liability
Withholding tax on payments to nonresident
service providers

Miscellaneous matters

Foreign-exchange controls. Jordan does not currently impose any foreign-exchange controls.

Debt-to-equity rules. Jordan does not currently have debt-to-equity rules.

Tax treaties

Jordan has entered into double tax treaties with Algeria, Azer­baijan, Bahrain, Bulgaria, Canada, Croatia, the Czech Republic, Egypt, France, India, Indo nesia, Iran, Iraq, Italy, Korea (South), Kuwait, Lebanon, Libya, Malaysia, Malta, Morocco, the Nether­lands, Pakistan, the Palestinian Authority, Poland, Qatar, Romania, Sudan, Syria, Tunisia, Turkey, Ukraine, the United Kingdom, Uzbekistan and Yemen.

In addition, Jordan has entered into tax treaties, which primarily relate to transportation, with Austria, Belgium, Cyprus, Denmark, Italy, Pakistan, Spain and the United States.

The following is a table of treaty withholding tax rates.







Algeria 15 15 15
Azerbaijan 8 8 10
Bahrain 10 10 10
Bulgaria 10 10 10
Canada 10/15 10 10
Croatia 10 10 10
Czech Republic 10 10 10
Egypt 15 15 20
France 5/15 0/15 5/15/25
India 10 10 20
Indonesia 10 10 10
Iran 5/7.5 5 10


Iraq — * — * — *
Italy 10 10 10
Korea (South) 10 10 10
Kuwait 5/10 5 30
Lebanon 10 10 10
Libya — * — * — *
Malaysia 10 15 15
Malta 10 10 10
Morocco 10 10 10
Netherlands 15 5 10
Pakistan 10 10 10
Palestinian Authority — * — * — *
Poland 10 10 10
Qatar 10 5 10
Romania 15 12.5 15
Sudan 15 15 15
Syria 10 10 18
Tunisia — * — * — *
Turkey 10/15 10 12
Ukraine 10 10 10
United Kingdom 10 10 10
Uzbekistan 7/10 10 20
Yemen 10 10 10

* The treaty does not provide for a maximum withholding tax rate.

Jordan is negotiating a double tax treaty with the United Arab Emirates.