Corporate Tax in Jordan

The corporate rate in Jordan is generally set at 20%. The 20% general rate has applied since 2015 (Income Tax Law No. 34 of 2014), with a 1% national contribution tax added from 2019; historically, the rate reached an all-time high of 25% in 2007, with the lowest rate being registered in 2010 at 14%. In this article, our company formation advisors in Jordan explain more aspects related to the corporate tax in this country.

More details on the corporate tax in Jordan

The corporate tax rates in Jordan are usually applied depending on the industry or the business operations which are generating income for the legal entity.

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

• 35% for banks;
• 24% for telecommunication, reinsurance and insurance, financial intermediation corporations, businesses which produce and distribute electricity, as well as those which undertake mining raw material operations;
• 20% for the industrial segment (the former reduced 14% rate was phased out);
• 20% for other companies; in addition, a national contribution tax of 1% to 7% applies depending on the sector (e.g. 1% for most companies, 3% for banks).

Companies which are resident in Jordan are not taxed with an income taxation on their worldwide income, except if that income is generated from sources which come from and are connected to Jordanian deposits and funds. Our company registration consultants in Jordan can offer further information on this matter. 

Foreign branches of local resident legal entities are taxed on their net income with a fixed rate of 10%.

There are no local income taxations in this country. 

Other taxes for companies in Jordan

Other taxes which are applied to companies in Jordan are:

• Capital gains tax: the capital gains in Jordan are taxed at the corresponding corporation tax rate if the assets are subject to depreciation regulations;
• Dividend distribution taxation: profits deriving from stocks and dividends which are distributed by a resident to another resident of the country are not taxed, except the profits from mutual investment, funds or banks, as well as financial companies;
• VAT (Value Added Tax/Sales Tax): the rates of the sales tax in Jordan are:
  • 16% for usual goods and services;
  • 8% for home internet, building iron, certain kinds of food and reinforcement steel;
  • Other rates: our company formation agents in Jordan can offer more details on these other rates. We can also help entrepreneurs in starting a business in Jordan.

If you have more questions about the corporate tax rates in Jordan, or for help to open a company in Jordan, please contact us.