Tax Compliance

Tax compliance can be made accessible in Jordan with the assistance of our tax experts here at Enterslice. Package inclusions: International Tax Planning Direct Tax Advisory on Mergers and Acquisitions Corporate Tax Compliance/li> Guidance and Advice on types of taxes in Jordan

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Overview of Tax Compliance in Jordan

The Income and Sales Tax Department (ISTD) was created by the Jordanian tax authorities to maintain compliance and efficiently collect taxes. Assessments of taxes, collection of taxes, and other tax compliance rules are under the control of this department. To avoid fines and legal implications, taxpayers must keep proper records and must comply with tax regulations and laws on time. Water, oil, and other natural resources are scarce in Jordan, which has one of the worst economies in the Middle East. However, there was a noticeable turnaround in the first quarter of 2023, when the Jordanian economy expanded 2.8% year over year, above the 2% growth seen in the preceding quarter. The country focuses a lot of emphasis on tourism and views it as a vital component of its economy.

Table of Contents

Types of taxes in Jordan

  • Sales Tax

The sales tax is levied at the rate of 16% in Jordan. There are some services that are exceptions to sales tax, like services related to education, public health, air transport, some religious activities, activities related to social organizations and services related to the disposal of sewage and waste. Sales tax is similar to value-added tax. Some of the goods are also exempted from the sales tax. The services and goods exported from special economic zones have zero sales tax.

  • Corporate Income tax

This type of tax is imposed on the revenue which is earned by the companies. The corporate income taxes in Jordan are divided into certain categories, and the CIT rates are according to those categories. The Corporate income tax for companies is 20%, while for insurance, telecommunications and financial intermediation companies, the rate is 24%. The corporate tax rate for banks is 35% in Jordan. All businesses have the legal obligation to fulfil all the rules related to tax compliance, or they will face penalties and fines.

  • Custom Duty

Custom duty is a tax which is levied on goods when it enters or leaves a country. It resembles the cost you must pay when importing or exporting goods. Some imported goods into Jordan need this kind of custom tax. The custom tariff, which adheres to a system known as the Harmonized Commodity Description and Coding System, determines the amount of customs duty according to the nature and origin of the goods.

  • Excise Tax

Some of the goods and services are levied with excise duty. Excise duty is the duty which is levied on certain goods and services which have origin in the country itself. Excise tax is an indirect tax. Wines, cars, beer, spirits, tobacco products, and cement are some of the goods that are imposed with excise duty in Jordan.

  • Property Tax

The property tax is decided on the basis of the area of the property along with the location of the property by the municipality in Jordan. This tax is to be paid annually.

  • Stamp Duty

The stamp duty generally is between 0.3% and 0.6%.

  • Transfer Property Tax

A tax called a "transfer property tax" is applied when real estate is transferred from one owner to another. Property transfers are subject to a 9% tax, which is made up of a 5% registration charge and a 4% tax on the sale of theproperty.

Tax Audit

The purpose of a tax audit is to guarantee that tax rules and regulations are being followed by the tax authorities through a formal inspection and evaluation of the financial records and tax returns of an individual or company. A tax audit is performed to check the accuracy and thoroughness of the data submitted on tax returns and to look for any discrepancies or possible problems that may need further examination. To reduce the possibility of a tax audit, it is crucial for companies to have accurate and well-organized financial records and to abide by the law. Within a year after the return's filing date, the tax audit is most likely to occur.

Tax Period in Jordan

The term "tax period" in Jordan refers to the precise time range that taxpayers must record their financial operations and determine their tax responsibilities. The tax year, which usually lasts one year and spans from January 1 to December 31, is the same length as the country's fiscal year.Individuals, companies, and other organizations in Jordan are required to keep thorough records of their earnings, expenditures, and other financial dealings during the tax period. They make use of this information to compile and file their yearly tax returns, which are sent on time to the tax authorities.

Services offered by Enterslice

  • International Tax Advisory Services: As the world gets more globalized, businesses are increasingly engaging in cross-border transactions with complex international tax implications. Enterslice's worldwide tax consulting services provide customers with complete Advice on international tax planning and compliance. Their expertise supports businesses in managing the complexities of global taxes and optimizing their global tax situation.
  • Corporate Tax and Regulatory Compliance: Companies must adhere to corporate tax regulations in order to maintain their financial health and avoid monetary penalties. Enterslice assists companies in meeting their corporate tax obligations by providing professional guidance on tax strategy, compliance, and reporting. They ensure that businesses comply with ever-changing tax requirements, eliminate risks, and optimize their tax approach.
  • Income Tax Notice Help: Getting an income tax notice can be difficult, but Enterslice is well-equipped to provide expert guidance and assistance. Their expert staff assists clients in comprehending and responding to income tax notices, guaranteeing compliance with applicable laws and regulations.
  • Corporate Tax (Research and Development Tax): Enterslice recognizes the importance of R&D activities to businesses. They offer comprehensive company tax services, including specialized guidance on getting R&D tax breaks. By utilizing their knowledge, clients may optimize their tax situation and R&D tax benefits.
  • Corporate Tax Advisory Services: Enterslice's corporate tax advisory services are targeted to the specific requirements of businesses in a range of sectors. Their knowledgeable tax professionals offer customized solutions such as tax planning, structuring, and risk management approaches. Companies can leverage their expertise to make smart decisions, reduce tax payments, and maximize earnings.

Frequently Asked Questions

Yes, foreigners have to pay taxes in Jordan.

Income-based tax exemption thresholds for both companies and individual taxpayers in Jordan are different.

The business tax rate in Jordan is 20%.

The main types of taxes in Jordan are sales tax, excise and customs duty, transfer of property tax, property tax, and corporate income tax.

Taxes on the basis of income, sales taxes on products and services and a number of other deductions and exemptions are the tax rules in Jordan.

Both the individuals and the companies are taxed on the income they make in accordance with the tax rules and regulations in Jordan.

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