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Jordan

Taxes

If you are want to do business in Jordan, this article will educate you on the tax laws for a LLC(WLL), which is the most common legal entity in Jordan.

Jordan taxes corporate income under a territorial tax system. This means that usually offshore income, from our research, and your results may vary, is not subject to taxation. However, income from foreign branches and dividends received from non-resident entities may be taxed at a flat rate of 10%. The standard corporate income tax rate is 20%. For companies involved in the industrial sector income tax rate is 14%. Energy, telecommunications, mining, insurance and financial services companies are taxed at a 24% rate. Banks are taxed at 30%. Jordan ranks 70th when compared to corporate tax rate worldwide.

The value added tax (VAT) rate in Jordan is 16.00%, which ranks Jordan as 101th overall with regards to value added tax rate worldwide. In terms of other taxation, an employer will contribute 14.25% to the equivalent of a social security fund and an employee will contribute 7.50%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 90hours. Contributing to this is the number of yearly labor tax payments, which is 26 in JO.

Thin capitalisation mandates are in effect. Thin capitalisation refers to any sort of restrictions on companies' debt-to-asset ratios. Dividends received from a resident company are not taxable. Dividends received from a non-resident entity may be subject to a 10% final tax. Dividends are payments of earnings of the business, passed by the board, to a particular class of shareholders. Dividends can be one of the following stock, cash, or property. Capital Gains are usually tax-exempt. However, those obtained from depreciable assets and capital gains from banks, telecommunications, financial institutions and insurance companies may be taxable. A capital gains tax is levied on the profits that a corporation or natural person realizes when they sell sells a capital asset for a price that is higher than the purchase price.

There is no withholding tax on dividends paid to non-residents, except for profit distributions of financial institutions, which are taxed at 5%. Payments on interests and royalties to non-residents are subject to a 10% withholding tax.
There is no known tax on wealth in Jordan. There are no known inheritance and transfer taxes in JO. There is a real property tax. There are no widely used credits for innovation spend that include tax relieft in Jordan.

The above is not tax or legal advice for your company situation. Incorporations.io can refer you to a tax advisor in Jordan who will advise you. Ready to get started? Click incorporate now if you are in a hurry, or press the free consultation button above.

Country details

Jordan
JOD
Amman
Asia
Arabic (Jordan), English
6,407,085

Tax treaties

Country Type Date Signed
Malaysia DTC  1994-10-02
Croatia DTC  2005-02-20
India DTC  1999-04-20
Korea, Republic of DTC  2004-07-24
Canada DTC  1999-09-06
Qatar DTC  2004-01-12
Poland DTC  1997-10-04
Tunisia DTC  1988-02-14
Pakistan DTC  2006-03-02
Ukraine DTC  2005-11-30
United Kingdom DTC  2001-07-22
Malta DTC  2009-04-16
Netherlands DTC  2006-10-30
France DTC  1984-05-28
Czech Republic DTC  2006-04-10
Romania DTC  1983-10-10
Lebanon DTC  2002-10-31
Turkey DTC  1985-06-06
Indonesia DTC  1996-11-12
Italy DTC  2004-03-16
Morocco DTC  2005-03-16

Tax treaties Map

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