Jordan

Any income incurred in or from Jordan, regardless of the place of payment, shall be subject to tax. This includes, but is not limited to, income from:

• Business activities.
• Professional services or activities.
• Interest, commissions, discounts, currency differences, deposit profits, and profits from banks and other legal resident persons.
• Royalties.
• Selling of goods.
• Selling or leasing of movable properties located in Jordan.
• Leasing immovable properties located in Jordan and the income from key money.
• Selling or leasing intangible assets in Jordan, including goodwill.
• Insurance premiums due according to insurance and re-insurance agreements for risk in Jordan.
• All forms of telecommunication services, including international telecommunications.
• Transportation inside Jordan and transportation between Jordan and any foreign country.
• Re-export.
• Service compensation gained by a non-resident person from Jordan for a service provided to any person if the activity or the work related to this compensation was carried out or the output of this service was used in Jordan.
• Prizes and lottery if exceeds 1,000 Jordanian dinars (JOD), whether paid in cash or in kind.
• Any contract in Jordan, such as commercial agencies profits, and any other similar entities, whether their source is inside or outside Jordan.
• Any other source, which has not been exempted according to the provisions of the law.
• E-commerce of goods and services.

The following shall be exempted from tax:

• The King.
• Income of public and official institutions and municipalities, excluding its income from any compensation against rent and key money and investment activities or annual surplus that the Council of Ministers decides, upon the recommendation of the Minister, to be subject to tax.
• Income generated by non-operating foreign companies, such as the regional office and the representative office, and which is received for its business abroad.
• Income of charity awqaf (public endowment) and income from the Orphans Development Fund.
• Capital gains generated from inside the Kingdom are exempt except those realised from depreciable assets and gains from the sale of specific types of shares called 'Housas' on legal persons. Moreover, capital gains realised from the sale of shares (Ashom and Housas) of certain information technology (IT) companies and establishments are exempt for the first sale and within 15 years from the date of their registration or 1 January 2019, whichever is earlier.
• Income generated by venture capital funds companies as defined in the applicable Companies Law.
• Receipt of dividends from limited liability companies, general partnerships, limited partnership, and private and public shareholding companies that are resident in Jordan is exempt. This exemption does not extend to the receipt of dividends for banks, main telecommunication companies, mining raw material companies, insurance and reinsurance companies, financial intermediaries, financial companies, and legal persons carrying out financial leasing activities.
• Income derived by non-Jordanian resident investors from sources outside Jordan that are initiated from their investments of their foreign capital, returns, profits, and proceeds from their investments' liquidation, returns, or selling of their projects, shares, or stocks after transferring them outside Jordan in accordance to the enacted Investment Law or any other law that will replace it.
• Compensation paid by insurance entities, other than what is paid as reimbursement for the loss of income from business activity or employment.
• Income from employment paid to members of the diplomatic or consular bodies representing other countries in Jordan who are non-Jordanian, subject to the reciprocal treatment principle.
• Income from inheritance as per the provisions of the relevant regulations.
• End of service indemnity and within certain thresholds.
• The first JOD 2,500 of the monthly pension salary.
• Income from employment generated by blind and fully handicapped persons.
• Any income generated by banks and financial companies not operating in Jordan from banks operating in Jordan, such as deposit interest, commissions, and deposit profits from investment in interest-free banks and financial companies.
• Profits gained by re-insurance companies from insurance contracts concluded with insurance companies operating in Jordan.
• Income covered by double taxation agreements (DTAs) concluded by the government, to the extent of that which is covered under these agreements.
• Distributions by solidarity fund of unions.
• The income of public or private pension funds and savings funds and any other funds approved by the Minister shall not be subject to tax if this income is derived from the employees’ and employers’ contributions.
• Certain types of local origin goods and services' exports outside Jordan may be totally or partially exempted from tax as set forth in regulations issued for this purpose.
• Income from agriculture activities within certain threshold.

Inventory valuation

Inventory is generally valued in accordance to the International Financial Reporting Standards (IFRS) accounting framework.

Capital gains

Capital gains generated from inside the Kingdom are exempt except those realised from depreciable assets and gains from the sale of specific types of shares called 'Housas' on legal persons.

Moreover, capital gains realised from the sale of shares (Ashom and Housas) of certain IT companies and establishments are exempt for the first sale and within 15 years from the date of their registration or 1 January 2019, whichever is earlier.

Dividend income

Receipt of dividends from limited liability companies, general partnerships, limited partnership, and private and public shareholding companies that are resident in Jordan is exempt.

This exemption does not extend to the receipt of dividends for banks, main telecommunication companies, mining raw material companies, insurance and reinsurance companies, financial intermediaries, financial companies, and legal persons carrying out financial leasing activities, where these dividends are also subject to national contribution.

Moreover, dividend income received from a non-resident juristic person is subject to income tax as well as national contribution.

Foreign income

Jordanian resident corporations are not subject to income tax on their worldwide income unless that income is raised from sources that originate and relate to Jordanian deposits and funds, in which case this income would be taxed at rate of 10%. For foreign branches of Jordanian resident corporations, all of the branch net income is taxed at a fixed rate of 10%.