A general sales tax similar in operation to a value-added tax (VAT) is imposed at the rate of 16% on the following transactions:
- Sales of goods or services, or both.
- Importing any service or goods from outside Jordan or from the free zone areas and markets inside Jordan.
Special tax rates are applied on certain items (see Excise tax below).
A zero rate is applied to the export sales of goods and services outside Jordan, to the free zone areas and markets, to the Aqaba Special Economic Zone (ASEZ), and to development areas.
Goods exempt from sales tax include bread, water packed in less than five litres, tea, sugar, gold, money, and electricity.
Services exempt from sales tax include the following:
- Air transport.
- Disposal of sewage and waste.
- Public health and similar activities.
- Activities of religious organisations.
- Activities of social organisations.
Certain goods imported to Jordan are subject to customs duties. Customs duties vary depending on the type and the origin of imported goods, as prescribed by the Customs Tariff. The Customs Tariff is based on the Harmonised Commodity Description and Coding System (HS Nomenclature).
Excise tax is the special sales tax that is imposed on certain goods and services, including cement, tobacco products, wines, spirits, cars, beer, fuel, and lubricants.
There is a property tax in Jordan that is paid annually, and the tax rate is determined by the municipality depending on the location and size of the property and, in case of buildings, depending on annual rental value.
Transfer property taxes
Transfer of property is subject to tax at a rate of 9% (registration fee at a rate of 5% and sale of property tax at a rate of 4%).
Generally, an ad valorem stamp duty of 0.3% or 0.6% is levied.
As per the income tax law, the payroll tax rates are imposed at progressive rates ranging from 5% to 30%.
Social security tax
Social security tax is imposed on the employer and the employee at rates of 14.25% and 7.5%, respectively, on the monthly salaries and certain allowances. The employer should report and withhold these contributions on a monthly basis.