Jordan Corporate Tax Guide 2026

Overview — Corporate Tax in Jordan

Corporate tax in Jordan is governed by the Income Tax Law (No. 34 of 2014 as amended) and administered by the Income and Sales Tax Department (ISTD). A company is tax resident in Jordan if it is incorporated under Jordanian law or if its place of effective management is in Jordan. Resident companies are taxed on worldwide income; non-resident companies are taxed only on Jordanian-source income. The standard tax year is the calendar year, though companies may apply for a different fiscal year with ISTD approval.

Standard Corporate Tax Rate — 20%

The standard corporate income tax rate in Jordan is 20% of taxable profits for resident companies. Non-resident companies with a permanent establishment in Jordan are taxed at the same rate on Jordanian-source income. Taxable profit is calculated as gross revenue less allowable deductions including operating expenses, depreciation, interest costs (subject to thin capitalisation rules), and losses carried forward. Losses may be carried forward for up to 5 years for most companies.

Sector-Specific Rates

Jordan applies differentiated CIT rates based on industry sector:

• 24% — Banks and telecommunications: Banking institutions, financial services, and telecommunications companies pay a higher rate of 24%.
• 10% — Mining and extractive industries: Mining companies, including potash and phosphate extraction, benefit from a reduced rate of 10%.
• 5% — Agriculture, hotels, and certain manufacturing: Agricultural activities, hotel operations, and specific manufacturing sectors (e.g., pharmaceuticals, garments) pay a reduced rate of 5% as an incentive.

Depreciation — Capital Allowances

Jordan uses a capital allowance system for tax depreciation. Standard annual rates include: buildings 3–5% (straight-line), machinery and equipment 10–15% (declining balance), computers and software 33% (declining balance), and motor vehicles 15% (declining balance). Investment incentives are available for qualifying sectors, including accelerated depreciation for renewable energy projects and manufacturing equipment.

Loss Carry-Forward

Tax losses may be carried forward for up to 5 years from the year the loss was incurred. Losses cannot be carried back. The loss carry-forward is available to all resident companies, subject to continuity of ownership and business activity tests. Where there is a substantial change in ownership (more than 50%) or business activity, ISTD may disallow the loss carry-forward.

FAQs

What is the penalty for late filing of corporate tax returns?

Late filing attracts penalties starting at JOD 100–500 depending on the delay. Late payment attracts interest on the unpaid amount. Non-compliance may result in ISTD enforcement actions.

Can a foreign company have a branch in Jordan?

Yes, foreign companies may operate through a branch registered with the Companies Control Department. The branch is taxed at the standard CIT rate of 20% on its Jordanian-source profits.

Are dividends paid by a Jordanian company subject to withholding tax?

Dividends paid to Jordanian residents are generally exempt from withholding tax. Dividends paid to non-residents are subject to 0% withholding tax (no WHT on dividends under Jordanian law).

Does Jordan have general anti-avoidance rules?

Yes, the Income Tax Law includes general anti-avoidance provisions allowing ISTD to recharacterise transactions entered into for tax avoidance purposes. Transfer pricing rules follow OECD guidelines.

Disclaimer

This guide provides general information about Jordanian corporate tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Jordanian tax advisor or the Income and Sales Tax Department for advice specific to your situation. InvestmentKit does not provide tax advice.