Jordna’s Income Tax At a Glance

June 21, 2009 | Posted by East CPA

Corporate tax

Tax rate for resident companies	Corporate tax rate is: 15% for companies in the following sectors: hospitals, hotels, mining, industry, construction and transportation. 35% for companies in the sectors of banks and finance. 25% for companies in the sectors of insurance, exchange, trade, telecommunications, services and other.
Tax rate on long-term capital gains	In Jordan, capital gains are levied at the normal corporate income tax rates, except for gains on the sale of shares, which are not taxable.
System governing groups of companies and dividends paid by subsidiaries to their parent companies	Dividends are not subject to tax in Jordan.
Tax rate on branches	Branches are taxed in the same way as the other companies in Jordan.

Income tax

Fiscal year

The fiscal year begins on January 1-st and ends on December 31 of the same year.

Income tax rate

Rate is progressive, it varies between 5 and 30%

From 0 to JD 2,000	5%
From JD 2,001 to JD 4,000	10%
From JD 4,001 to JD 8,000	15%
From JD 8,001 to JD 12,000	20%
From JD 12,001 to JD 16,000	25%
Beyond JD 16,000	30%

VAT rates

Standard rates	The VAT is represented by a General Sales Tax (GST). It applies to national products as well as imported products. The rate of this tax is 16%.
Reduced rates	There are some GST exempt products.

Other important taxes

Name of tax	Rate
Stamp duties	0,30%

Accounting

Introduction
All the profit-making organizations of Jordan are subjected to the obligation of certification and publishing their accounts. Since 1987, a body is in charge of checking the quality of the accounting information called the “Jordanian Association of Certified Accountants”.
General accounting principles
There is no obligation to produce accounting information. Nevertheless, the information published must be clear, easily understandable and reliable. Only the banking sector is subjected to some obligations.

Obligations and publications
The “Jordanian Commercial Law” obliges any company to hold an account book, a stock account as well as a business correspondence register. These documents must be kept on the Jordan Territory and drafted in English or Arabic.

Certification and auditing
The certification and the control of accounts in Jordan refers to the recommendations from the “Jordanian Association of Certified Public Accountants” who has adopted on January 01, 1980 the International Accounting Standard. Only the auditors who have received this certification are authorized to valid annual reports.

Professionals and representative organizations
The “Arab Society of Certified Accountants”.