Jordan

Corporate - Withholding taxes

Last reviewed - 02 July 2020

Dividends paid

Receipt of dividends from limited liability companies, general partnerships, limited partnerships, 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.

Dividends that fall out of the exemption and paid to non-residents will be subject to 10% WHT.

Non-resident WHT

With respect to services performed by a non-resident juristic or natural person, under the income tax law, "Amounts received or earned by the non-resident person from the Kingdom, which are derived from services provided to any person if the work or service related has been performed in the Kingdom or if the outcome of such services has been used in the Kingdom as well, is subject to tax in Jordan".

The WHT rate on services performed by a non-resident juristic or natural person is 10% of the payment. The same rate applies to royalty payments to non-residents. In addition, payments to non-residents are subject to a national contribution deduction with accordance to the service provider industry ranging from 1% to 7%. 

Resident WHT

The following services are subject to resident WHT of 5% if provided by resident natural persons or civil companies: services provided by resident doctors, lawyers, engineers, auditors, experts, consultants, commissioners for taxpayers, insurance and reinsurance agents and brokers, arbitrators, commission brokers and agents, financial intermediaries, and commission shipping agents.

Income from interest, deposits, commissions, and profits of deposits participating in banks and financial company investments that do not take interest and paid by banks and financial companies in Jordan to any person is subject to WHT at the rate of 5% for individuals and 7% for legal persons, provided these withheld amounts shall be considered final tax for the non-resident legal person and the natural person. However, interest, profits of deposits, and commissions incurred for banks to other banks and due to any other bodies or entities defined by the executive instructions are exempt for this WHT.

Tax treaties

Jordan has entered into income tax treaties with Algeria, Azerbaijan, Bahrain, Bulgaria, Canada, Croatia, the Czech Republic, Egypt, France, India, Indonesia, Iran, Iraq, Italy, Saudi Arabia, South Korea, Kuwait, Lebanon, Libya, Malaysia, Malta, Morocco, the Netherlands, Pakistan, Palestine, Poland, Qatar, Romania, Sudan, Syria, Tunisia, Turkey, Ukraine, United Arab Emirates, the United Kingdom, Uzbekistan, and Yemen.

Jordan has transportation agreements with many countries and is negotiating treaties with more countries.