Jordan’s tax system follows a territorial approach, taxing only income sourced within the country. With personal income tax rates ranging from 5% to 30% and a standard corporate tax rate of 20%, Jordan offers a relatively straightforward tax structure. Notably, there are no wealth, inheritance, or gift taxes. While Jordan lacks formal anti-avoidance and transfer pricing rules, it maintains double tax treaties with several countries and has taken steps toward greater international tax transparency.
Jordan’s Tax System overview
| Corporate Income Tax: | 20% Standard Rate |
| Personal Income Tax: | 5%-30% progressive |
| Inheritance Tax: | None |
| Gift Tax: | None |
| Wealth Tax: | None |
Legal System
The Hashemite Kingdom of Jordan is a constitutional monarchy, which applies a mixture of Ottoman Law and Sharia.
Currency and Foreign Exchange Controls
The currency is the Jordanian Dinar (JOD). Jordan has no foreign exchange controls.
Personal Income Taxation
Jordan has a territorial system of taxation for individuals. Jordanian residents are subject to tax on Jordanian source income at progressive rates from 5% to 30%.
Corporate Income Tax
Jordan has a territorial system of taxation for corporations, subject to tax on Jordanian sourced income at a standard rate of 20%. However, other rates apply to specific industry sectors, ranging from 14% for drug and textiles manufacturing to 35% for banks.
A “National Contribution Tax” also applies to corporations at rates ranging from 1% to 7%.
Value Added Tax (VAT)
Jordan levies a 16% sales tax on most goods and services, with some exemptions.
Anti-Avoidance Rules
Jordan does not have general Anti-Avoidance rules, and does not have formal Transfer Pricing rules, but requires related party transactions to be arm’s length. Jordan has Thin Capitalization rules, but has no Controlled Foreign Corporation (CFC) rules.
Double Tax Treaties (DTTs)
Jordan has DTTs with Algeria, Azerbaijan, Bahrain, Canada, Czech Republic, Egypt, France, Kuwait, Lebanon, Malta, Netherlands, Qatar, Saudi Arabia, UAE, and the UK.
OECD Multilateral Convention
Jordan has ratified the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in 2020, but it is not in effect. The Convention requires parties to exchange information “on request,” and allows parties to agree spontaneous and automatic exchange.
Common Reporting Standard (CRS)
Jordan has not executed the Multilateral Competent Authority Agreement (MCAA) to implement automatic exchange under CRS, but has committed to joining CRS.
FATCA
Jordan has not executed a FATCA Intergovernmental Agreement (IGA) with the US, and is not treated as having an “agreement in substance.”
