Tax laws Jordan
Jordan's taxation system comprises various taxes applicable to individuals and corporations. Here's an overview:
Personal Income Tax:
Taxable Income: All income earned within or from Jordan is subject to taxation, regardless of the payment's location.
Tax Rates: Individual income tax rates in Jordan are progressive, ranging from 5% to 30%, with several deductions and allowances available.
Exemptions:
- Private Sector Employees: A 50% tax exemption is granted on annual salaries up to JOD 12,000, and a 25% exemption applies to salaries exceeding this amount.
- Foreign Employees: Individuals working for non-Jordanian companies in Jordan are fully exempt from income tax.
National Contribution Tax: An additional 1% tax is levied on annual taxable income exceeding JOD 200,000.
Corporate Income Tax:
General Rate: Corporate income is taxed at rates specified in the Income Tax Law, with certain sectors subject to higher rates.
Sector-Specific Rates:
- Banks: Subject to a 40% tax rate.
- Mining Companies: Taxed at 30%.
- Insurance and Reinsurance Companies: Subject to a 40% tax rate.
- Financial and Leasing Companies: Taxed at 40%.
Additional Taxes:
Import Tax: Importers are required to pay a 2% advance payment of the import value, collected by Jordan Customs.
Withholding Tax: Jordan imposes withholding taxes on various payments, including dividends, interest, and royalties, with rates varying based on the recipient's residency and the nature of the payment.
Recent Developments:
In 2018, the Jordanian government proposed significant amendments to the Income Tax Law to address fiscal challenges and reduce public debt. The proposed changes included increasing tax rates for certain income brackets and sectors. These measures led to widespread protests, resulting in the government's withdrawal of the tax bill and the resignation of Prime Minister Hani Mulki.
It's important to note that tax laws are subject to change. For the most current information, consulting official Jordanian government sources or tax professionals is recommended.
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