Taxation in Jordan

The corporate income tax rate in Jordan represents a tax which is collected from companies. Its amount is based on the net income obtained by companies which activate in the country, usually during one business year. As follows, our company formation consultants in Jordan present the taxation system in this country.

Corporate income taxes in Jordan

The corporate tax rates in Jordan are calculated based on the sector or the business activities from which the legal entity obtains income.

Under the income tax law, the corporate tax rates in Jordan are:

• 35% for banks;
• 24% for telecommunication, reinsurance and insurance, financial intermediation (such as exchange and finance leasing) companies, businesses which produce and distribute electricity, as well as businesses which effectuate mining raw material operations;
• 14% for the industrial sector;
• 20% for other businesses. Our company registration advisors in Jordan can provide more details on what these other businesses can be. We can also assist you in starting a business in Jordan.

 The resident businesses in Jordan are not subject to income taxation on their worldwide income, except if that income is gained from sources which come from or relate to the local deposits and funds.

Foreign branches of local resident companies in this country are taxed on the branch net income with a fixed rate of 10%.

Withholding taxes in Jordan

In Jordan, the following withholding taxes are applied:

• Interest: the withholding tax on interest paid to a non-resident is set at 10%. If there is a tax treaty, this rate can be reduced. Our company formation agents in Jordan can provide more information on this withholding tax in this country;
• Royalties: the withholding taxationon royalties paid to a non-resident is 10%. If there is a tax treaty, this rate can be reduced;
• Management fees: the management fees paid to a non-resident are subject to 10% taxation, except if the rate is reduced by a tax treaty.

The fees paid to a domestic provider of certain types of services are taxed with a withholding income tax rate of 5%.

This tax is regarded to be a payment on account for the service providers and can be offset against the yearly income tax liability when filling the annual income tax returns for a time frame of four years from the date of withholding.

If you have more questions about the taxes on corporate income in Jordan, or for help to open a company in Jordan, please get in touch with our friendly staff.