Jordan

Individual - Income determination

Last reviewed - 28 December 2020

Any income incurred in or from Jordan, for any person, regardless of the place of payment, shall be subject to tax in Jordan.

Employment income

Salaries, wages, allowances, and bonuses (in cash or in kind) received from any employment, including the estimated annual value of housing, lodging, boarding, or any other allowance, are taxable in Jordan.

The first JOD 2,500 of monthly pension salary paid by a resident person shall be exempt from income tax.

Moreover, there is an annual exemption of JOD 2,000 for people with full or partial disabilities.

Equity compensation

Generally, income from stock options and restricted stock are subject to tax within the individual's taxable income.

Business income

Income from professional services or activities, and any other income from business activity or investment, unless specifically exempted according to Jordan's Income Tax Law, is combined with the other categories of income in order to determine PIT through the filing of an individual income tax return.

Note that the first 50,000 of the annual income generated from agricultural activity inside Jordan is not taxable for a natural person.

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 partnerships, and private and public shareholding companies that are resident in Jordan is exempt.

Dividends received by a resident person from a non-resident person are taxable in Jordan provided that they originate from money or deposits from inside Jordan.

Interest income

Interest income is taxable and should be included in taxable income to determine PIT.

Rental income

Income from leasing property (moveable, immovable, or intangible) in Jordan is taxable and should be included in taxable income to determine PIT.

Exempt income

According to Jordan's Income Tax Law, the following income is exempt from PIT:

  • Compensation paid by insurance entities, other than what is paid as a reimbursement for the loss of income from business activity or employment.
  • Income from employment paid to members of non-Jordanian diplomatic or consular bodies representing other countries in Jordan, subject to the reciprocal treatment principle.
  • Income from distribution of estates or wills for the inheritors or the devisees, according to the provisions of the effective legislations.