Jordan

Corporate - Group taxation

Last reviewed - 26 July 2021

Group taxation is not permitted in Jordan.

Transfer pricing

The Transfer Pricing regulation in Jordan requires transactions between related parties to be dealt with on an ‘arm’s length basis’, i.e. on
similar terms and conditions that could have been agreed upon, if the persons involved in the transactions were independent. In addition, taxpayers are required to comply with annual TP documentation requirements as follows:


- TP disclosure form – To be submitted by the time the tax return is due. The form is expected to include certain information on related party transactions including the nature of transactions, the TP method, etc.
- TP Master file and Local File – To be maintained with the TP disclosure form and submitted upon request by the Income and Sales Tax Department (“department”). An exemption is provided for natural persons and small establishments with arm’s length value of related party transactions not exceeding 500,000 Jordanian Dinars (“JOD”)
- Country by Country Report (“CbCR”) and notifications – CbCR notification to be submitted by the time the tax return is due and CbCR to be submitted within 12 months from the year end. Requirements applicable to both Jordan headquartered and non-Jordan headquartered multinational Groups with consolidated revenue more than JOD 600 million (approx. EUR 695 million / USD 845 million).

Thin capitalisation

A 3:1 debt-to-equity ratio would apply in respect of related party debt (e.g. shareholder debt). No restriction should apply on unrelated party financing.

Interest (including capitalised interest) on the related party debt exceeding the 3:1 debt-to-equity ratio would not be deductible for CIT purposes.

For the purposes of the debt-to-equity ratio, equity is the higher of: (i) paid in share capital or (ii) average equity.

Controlled foreign companies (CFCs)

In the Jordanian tax laws, there is no definition of a CFC.