Business Environment

flag Jordan Jordan: Business Environment

In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices


Accounting Rules

Tax Year
The fiscal year begins on January 1 and ends on December 31 of the same year.
Accounting Standards
There are no particular accounting standards. The standards must conform to recognized international principles of accounting and audit .
Accounting Regulation Bodies
Accounting Reports
Every company must keep a book of accounts, a stock inventory and a register of commercial correspondence. These documents must be kept in Jordan and be written in Arabic or in English.
Publication Requirements
The banking sector is obliged to publish its accounts.
Professional Accountancy Bodies
Arab Society of Certified Accountants
Jordanian Association of Certified Public Accountants
Certification and Auditing
The certification and the control of accounts in Jordan refer to the recommendations from the "Jordanian Association of Certified Public Accountants" which adopted, on January 1st 1980, the standards of the IFRS. Only the auditors who have received this certification are authorized to validate annual reports: Deloitte, Ernst & Young and PricewaterhouseCoopers.
Accounting News

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Tax Rates

Consumption Taxes

Nature of the Tax
 General Sales Tax (GST) - It applies to locally manufactured products as well as imported ones.
Tax Rate
Reduced Tax Rate
Several items are exempt: wheat, bread, electrical energy, firefighting vehicles, education, medical services.
A zero rate applies to the export sales of goods and services, the free zone areas and markets, the Aqaba Special Economic Zone (ASEZ), raw materials for the production of medicine, and development areas.
4% reduced rate: oils and ghee; supplies used by the handicapped; veterinary medicines.
Corn is taxed at 5%.
10% reduced rate: live animals, cheese.
1% reduced rate: gloves; hygiene products and disinfectants
2% reduced rate: food salt; pencils.
Other Consumption Taxes
Excise duties are levied on cement, tobacco, wine, liquors, cars, beer, oil products and lubricants.

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Corporate Taxes

Company Tax
20% (21% with the national contribution tax)
Tax Rate For Foreign Companies
Resident corporations are subject to corporate income tax on their Jordan-source income, unless an income is raised from sources that originate and relate to Jordanian deposits and funds, in which case this income would be taxed at a rate of 10%.
Non-resident corporations are taxed through withholding tax. Branches of foreign companies are taxed in Jordan at the prevailing corporate tax rates. Foreign branches of Jordanian resident companies are taxed at a fixed rate of 10% of net income.
Capital Gains Taxation
Capital gains are tax-exempt, except for those arising from depreciable assets, the sale of shares in a legal entity and the sale of shares in IT companies that occur after 15 years from the date of their establishment or after 1 January 2019, whichever is earlier.
Main Allowable Deductions and Tax Credits
Amortisation of tangible and intangible assets is tax-deductible. Goodwill can also be deducted. The Jordanian tax code does not include any provisions for start-up costs, but these can usually be deducted in the first year of business activity.
Interest charges (a 3:1 debt-to-equity ratio applies to interest paid on related party debt) and bad debt are generally deductible.
Donations to charitable organisations are deductible up to 25% of taxable income.
Fines are not deductible while taxes can be deducted from the tax base.
Insurance premiums, social security contributions, hospitality expenses, marketing, scientific research, development, and training expenses are deductible.
Tax losses incurred before 1 January 2015 may be carried forward indefinitely. The carryforward is limited to five years for losses incurred after 1 January 2015. Loss carryback is prohibited.
Other Corporate Taxes
Property tax is calculated by local authorities based on the location and size of the property or, in some cases, the rental value of the property (15% on average).
Property transfer taxes amount to 9% of the selling price (5% for registration fees and 4% for sale).
Stamp duties are levied at a rate of 0.3% for private contracts and 0.6% for contracts with the state or public companies.
Social security contributions payable by the employer amount to 14.25% of salary (capped at JOD 3,349 per month).
Other Domestic Resources
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Jordan Middle East & North Africa United States Germany
Number of Payments of Taxes per Year 9.0 20.8 10.6 9.0
Time Taken For Administrative Formalities (Hours) 96.5 204.0 175.0 218.0
Total Share of Taxes (% of Profit) 28.6 32.1 36.6 48.8

Source: Doing Business - Latest available data.

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Individual Taxes

Tax Rate

Individual Income tax Progressive rate from 5% to 30%
JOD 0 - JOD 5,000 5%
JOD 5,001 to JOD 10,000 10%
JOD 10,001 to JOD 15,000 15%
JOD 15,001 to JOD 20,000 20%
JOD 20,001 to JOD 1,000,000 25%
Over JOD 1,000,000 30%
National contribution tax 1% (for annual income exceeding JOD 200,000)
Allowable Deductions and Tax Credits
Deductions and allowances are set at JOD 9,000 for a single person. A lump-sum deduction of JOD 1,000 is granted to expenses incurred for medical treatment, education, rent and interest on housing. A deduction of JOD 1,000 is granted for the spouse of the taxpayer and for each child (capped at JOD 3,000). Individuals with special needs are granted an additional exemption of JOD 2,000 per year. Personal deductions are capped at JOD 23,000 per family regardless of joint or individual tax returns.
Charitable contributions are deductible up to 25% of the taxable income, or without any limit if the recipient is any of the governmental departments, public or official institutions, or municipalities.
Most business expenses and insurance premiums are also deductible (bad debts, insurance premiums, certain taxes, hospitality and travel expenses, marketing, scientific research, development, and training expenses, etc.).
Special Expatriate Tax Regime
Both residents and non-residents are only taxed on their Jordan-source income.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of double taxation agreements Jordan
Withholding Taxes
  • Dividends: 0%
  • Interest: Residents: standard tax rates/Non-residents: 10%/7% (interest from deposits, commissions and profit participations of Islamic banks) + national contribution tax
  • Royalties: Residents: standard tax rates/Non-residents: 10% + national contribution tax.

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Intellectual Property

National Organisations
The organization in charge of protecting intellectual property is the Ministry of Trade and Industry.
Jordan is considered to be the country in the Middle East, North Africa region which protects intellectual property the most effectively. It is part of the Paris Convention for the Protection of Industrial Property, the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks and the Berne Convention for the Protection of Literary and Artistic Works.
Regional Organisations
Jordan does not belong to any regional organization for the protection of industrial property.

National Regulation and International Agreements

Type of property and law Validity International Agreements Signed
Patent Law 1953
16 years
Trademarks Law 1952
7 years renewable indefinitely
Industrial Design Law
5 years renewable for a period of 10 years  
Law n°22 of 1992
30 years after the death of the author. WIPO Copyright Treaty
Industrial Models
Law n° 14 of 2000
15 years after the registration of the model.  

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Legal Framework

Independence of Justice
The Judiciary is not independent in Jordan and is subject to executive influence through the Ministry of Justice and the Higher Judiciary Council whose members are appointed by the King. 
Equal Treatment of Nationals and Foreigners
Foreign nationals cannot be guaranteed an impartial trial from the country's judicial system.
The Language of Justice
The judicial language is Arabic.
Recourse to an Interpreter
An interpreter can be easily arranged.
Sources of the Law and Legal Similarities
The main source of the law is the constitution of 1952 (amended numerous times). The country’s legal system is based on Islamic law and French codes; as well as judicial review of various legislative acts in a specially provided High Tribunal. The country has not accepted compulsory ICJ jurisdiction. 
Checking National Laws Online
Website where the Jordanian laws are available.

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National Standards Organisations
JISM, Jordan Institution for Standards and Metrology Committee.
Integration in the International Standards Network
The organization in charge of the standardization of products in Jordan is the Jordan Institution for Standard and Metrology Committee (JSMO).
Any product, whether locally manufactured or imported, has to follow the Jordanian national standards which, for the greater part, meet international standards. If there are no national standards for a specific product, this has to match the corresponding international standards. The JISM is a member body of the International Organization for Standardization (ISO), and an associate member of the International Electrotechnical Commission (IEC).
Classification of Standards
JS then a number then the year.
Online Consultation of Standards
Jordanian standards are available on the JISM website. You have to pay to consult them.
Certification Organisations
JSMO Jordan Institution for Standards and Metrology.

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Business Practices

General Information
CommunicaidWorldbiz, Business culture in Jordan
Government of Canada, Cultural Information - Jordan
Opening Hours and Days
Banks: from 9 am to 12.00 pm and from 4 pm to 6 pm Saturday to Thursday.
Public administration: from 8 am to 2 pm Saturday to Thursday.
Shops: from 9 am to 8 pm Saturday to Thursday.
During the month of Ramadan, economic activity is considerable reduced and working hours change.

Public Holidays

New Year's Day 1 January
Labor Day 1 May
Independence Day 25 May
Army Day 10 June
Christmas Day 25 December
Hegirian calendar New Year's Day end December/ beginning January (variable)
Good Friday March (variable)
Easter Monday March (variable)
Birth of the Prophet March (variable)
Eid El Fitr 3 day festival at the end of Ramadan (variable)
Eid El Adha 3 day festival, 70 days after the end of  Ramadan (variable)
Ascension of the Prophet June (variable)
Holiday Compensation
If a public holiday falls on a Saturday or Sunday, the Monday is a holiday instead.

Periods When Companies Usually Close

Eid El Fitr It usually lasts three days at the end of Ramadan. In some regions it can last up to 10 days.
Eid El Adha 3 days, 70 days after the end of Ramadan. It can last 10 days in some regions.
The month of August It is not an official holiday period but during this time
activity really slows down.

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Latest Update: April 2024