Jordan's tax system is administered by the Income and Sales Tax Department (ISTD) under the Ministry of Finance. The two primary tax types are Income Tax (equivalent to direct taxation) and General Sales Tax (GST), which functions similarly to VAT in other MENA countries.
Individual Income Tax Brackets
Jordan applies a progressive income tax on individuals:
- Up to JOD 5,000: 5%
- JOD 5,001–10,000: 10%
- JOD 10,001–20,000: 15%
- Above JOD 20,000: 20%
Personal exemption: JOD 9,000 per year for the taxpayer + JOD 3,000 per dependent.
Corporate Income Tax by Sector
| Sector | Tax Rate |
|---|---|
| Banks | 35% |
| Insurance, Telecoms | 24% |
| Electricity, Mining | 24% |
| Manufacturing | 20% |
| Other sectors | 20% |
General Sales Tax (GST): Jordan's VAT Equivalent
Jordan's GST operates like VAT with a standard rate of 16%. Special rates apply to some sectors:
- Tourism and hotels: 8%
- Telecommunications: 24% + regulatory fees
- Basic foodstuffs, pharmaceuticals, education: Exempt
- Exports: 0% (zero-rated)
Compliance Deadlines
- Annual income tax return: Last day of April
- GST return: Monthly or quarterly depending on business size
- Quarterly advance income tax payments required during the year
Investment Incentives and Exemptions
Jordan's Investment Law provides significant tax incentives:
- Development zones (Aqaba, Zarqa): Reduced CIT rates of 5%–12%
- Industrial projects in designated areas: 3–7 year tax holiday
- Industrial exports: Income tax exemption on export profits
- IT sector: Preferential 5% corporate tax rate
- Aqaba Special Economic Zone: 5% flat income tax rate across most activities
E-Invoicing in Jordan
The ISTD is progressively rolling out an e-invoicing mandate. Large companies are already required to issue standardized electronic invoices containing the tax registration number and buyer entity code. Erpegy supports Jordan's e-invoicing requirements and can scale compliance as the mandate expands to SMEs.
How Erpegy Supports Jordanian Compliance
Erpegy manages invoices with multiple GST rates, prepares monthly GST reports, calculates corporate income tax on profits, handles payroll with Jordanian Social Security (SSC) contributions, and maintains full audit trails compliant with ISTD record-keeping requirements.