Jordan

Individual - Deductions

Last reviewed - 28 December 2020

Employment expenses

There are no deductible expenses for PIT purposes other than the personal deductions and exemptions mentioned below.

Personal deductions

Charitable contributions

  1. An individual may deduct any amount paid during the tax period as a donation to any of the governmental departments, public or official institutions, or municipalities from gross income in the period in which the payment occurred.
  2. Any person may deduct subscriptions and donations paid in Jordan, without any personal benefit, for religious, charitable, humanitarian, scientific, environmental, cultural, sport, and professional purposes if the Council of Ministers approves its character. The deductible amount, according to the provisions of this paragraph, shall not exceed 25% of the taxable income after deducting what is provided for in paragraph 1 above and before making this deduction.

Personal exemptions

To determine taxable income, the following exemptions are deducted from the gross income of a resident individual:

  • JOD 10,000 for the year 2019 and JOD 9,000 for the year 2020 and the following years for the taxpayer.
  • JOD 10,000 for the year 2019 and JOD 9,000 for the year 2020 and the following years for the resident dependants, regardless of their number.

Moreover, a further exemption is granted against the expenses incurred for medical treatment, education, rent, interest on housing, and murabaha on housing as follows:

  • JOD 1,000 for the taxpayer from 2020 and the following years.
  • JOD 1,000 for the spouse of the taxpayer from 2020 and the following years.
  • JOD 1,000 for each child and with a ceiling of JOD 3,000.

A Jordanian non-resident person can benefit from the exemption of the dependants residing in Jordan if the non-resident person is responsible for their support.

In cases of submitting joint or separate declarations, the exemption amount granted to a single family shall not exceed JOD 23,000.

Business deductions

A taxpayer may deduct acceptable expenses, including the following expenses, according to provisions and procedures defined in the tax law:

  • Foreign income tax paid for income earned from sources outside Jordan that was subject to tax under the provisions of the tax law.
  • Interest and murabaha (profit-sharing) paid by banks or financial institutions.
  • Bad debts.
  • Insurance premiums.
  • Maintenance expenses for assets that were spent within the tax period.
  • Taxes and fees paid on taxable activities.
  • Amounts paid as civil compensation under contracts concluded by the taxpayer for the purpose of carrying out taxable activities.
  • Expenses of prior tax periods, which were neither defined nor final.
  • Hospitality and travel expenses incurred by the taxpayer.
  • Marketing, scientific research, development, and training expenses.

Losses

If a loss is incurred by any person from any taxable business activity, this loss can be deducted from the profits of other business activities in the same tax period. If the loss reaches an amount that cannot be fully deducted, then its balance shall be carried forward to the next following tax period and then to successive periods after the tax period in which it was incurred.

As per the new income tax law, any accumulated losses can be carried forward up to five years.