Worldwide VAT, GST and Sales Tax Guide
EY
Mail address:
Street address:
300 King Abdullah II Street
P.O. Box 1140 Amman 11118
Amman 11118 Jordan Jordan
Indirect tax contacts
Jacob Rabie
Mohammed Freihat
Fadel Suleiman
A. At a glance
Name of the tax
+962 (6) 580-0777 jacob.rabie@jo.ey.com
+962 (6) 580-0777 mohammed.freihat@jo.ey.com
+962 (6) 580-0777 fadel.suleiman@jo.ey.com
Sales tax (ST) [the general sales tax law provides for two types of taxes, which are the general sales tax (GST) and the special sales tax (SST)]
Local name Dareebat Al-Mabi’at
Date introduced 1 June 1994
Trading bloc membership
Administered by
ST rates
GST rates
European Free Trade Association-Jordan Free Trade Agreement Greater Arab Free Trade Agreement Aghadir Agreement
Income and Sales Tax Department (ISTD) (http://www.istd.gov.jo)
Standard 16%
Reduced 1%, 2%, 4%, 5%, 10%
Other Zero-rated (0%) and exempt
SST rates
Various (20 types of goods and one type of service are subject to percentage rates or fixed amounts)
ST number format 9999999
ST return periods
GST return periods Bimonthly (i.e., every two months)
SST return periods Monthly
Thresholds
Registration JOD0 to JOD75,000 depending on supplies made
Recovery of GST by nonresident businesses
No
D. Rates
The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of ST, including the zero rate.
The ST rates are:
• Standard rate: 16%
• Reduced rate: 1%, 2%, 4%, 5%, 10%
• Zero-rate: 0%
The standard rate of ST applies to all supplies of goods or services, unless a specific provision allows a reduced rate or an exemption.
Twenty types of goods and one type of service are subject to ST. ST is imposed at various percentage rates or in fixed amounts. The ST rates and amounts are provided in Regulation No. 80 of 2000 and Regulation No. 97 of 2016 and Regulation No. 62 of 2024.
Certain goods and services detailed in Schedule 1 of the GST law are subject to both GST and SST.
Examples of goods and services taxable at 0%
• Printing service for any party provided that all supplies (inks, paper and all supplies, etc.) are from the printing press itself
• Raw materials for the production of medicine
Examples of goods and services taxable at 1%
• Hygiene and disinfectants
• Gloves
• Food salt
• Pencils
• Oils and ghee
Examples of goods and services taxable at 2%
Examples of goods and services taxable at 4%
• Supplies used by the handicapped
• Veterinary medicines
• Corn
• Live animals
• Cheese
Examples of goods and services taxable at 5%
Examples of goods and services taxable at 10%
Examples of goods and services subject to SST
• Beer (including nonalcoholic beer)
• Tobacco and tobacco products
• Vehicles (cars)
The term “exempt supplies” refers to supplies of goods and services that are not liable to ST and that do not qualify for input tax deduction.
• Wheat
• Bread
• Electrical energy
• Firefighting vehicles
Examples of exempt supplies of goods and services
• Education/training
• Medical services
Option to tax for exempt supplies. The option to tax exempt supplies is not available in Jordan.
E. Time of supply
ST becomes due at the time of supply, which is called the “tax point.”
The tax becomes due on the supply of goods at the earliest of the following events:
• Transfer of ownership of goods. However, the Director General of the ISTD may consider the date of the tax invoice as the tax point if it is issued periodically or at the end of a certain period following the date of delivery
• Issuance of a tax invoice.
• Receipt of the full or partial value of the goods, receipt of credit payment or any other receipt of value according to the agreed terms for payments
Tax becomes due on the supply of services at the earlier of the following events:
• Supply of service
• Issuance of a tax invoice
• Receipt of full or partial payment for the service
Tax is payable in the cases mentioned above by reference to the value covered by the invoice or the amount paid, whichever is higher.
However, importers of goods (customs) and services (reverse charge) must pay the 16% ST due at the earliest of the following dates:
• Within one month after the date of payment for the imported service or after the date of making a partial payment, limited to the amount paid
• When the means that include the goods (for example, compact disks and tapes) are released from Customs
• Within six months after the date on which the service or any part of the service is received, limited to the amount related to the part received
Deposits and prepayments. There are no special time of supply rules in Jordan for deposits and prepayments. As such, the general time of supply rules apply (as outlined above).
Continuous supplies of services. There are no special time of supply rules in Jordan for continuous supplies of services. As such, the general time of supply rules apply (as outlined above).
Goods sent on approval for sale or return. There are no special time of supply rules in Jordan for supplies of goods sent on approval for sale or return. As such, the general time of supply rules apply (as outlined above).
Reverse-charge services. There are no special time of supply rules in Jordan for supplies of reverse-charge services. As such, the general time of supply rules apply (as outlined above).
Leased assets. There are no special time of supply rules in Jordan for supplies of leased assets. As such, the general time of supply rules apply (as outlined above).
Imported goods. Importers of goods must pay the tax due on the goods at the clearance stage to the Customs Department in accordance with the procedures applicable for the payment of customs duties. Clearance of these goods is not finalized until the tax due is paid in full.
A registered importer may obtain permission from the ISTD to defer the payment of the tax payable on the importation of goods. This postponement is granted if the importer has no record of fraud or customs smuggling and has submitted all returns in the last 12 months.
Capital goods. There are no special recovery of ST rules in Jordan for capital goods. Therefore, the recovery of GST for taxable persons rules apply (as outlined above).
Refunds. Tax is repaid within a period not exceeding 30 days after the date on which the claim for refund has been filed if any of the following circumstances exist:
• Tax is paid on goods or services exported or used in the manufacture of other goods that have been exported.
• Tax is collected by mistake.
• Recoverable input tax that was paid at least two months ago and that was carried forward as a credit has not yet been deducted from the tax charged on supplies made during that period.
• Tax was paid on goods that left the country in the possession of nonresident persons, and the tax amount to be refunded cannot be not less than JOD50 but not more than JOD500.
• ST was previously paid on goods supplied to the bodies relieved from payment of tax under Article 21 of the GST law [the King of Jordan, embassies, diplomats and consuls (subject to reciprocity) and international and regional organizations working in Jordan].
Pre-registration costs. Following tax registration, a taxable person can recover ST paid or charged before registration on the goods provided that a tax invoice in proper form is presented and subject to the recovery of ST for taxable persons rules (as outlined above).
Bad debts. Relief for ST on bad debts can be claimed in the following cases:
• If the purchaser dies without leaving assets sufficient to pay the tax
• If the purchaser declares that its funds are not sufficient to pay the debts in full or in part, or if it fails to pay or communicate about the debt for two years
• If the seller has exhausted all legal means to collect the debt, including the tax, with no success
• If the seller has proved that the buyer has declared bankruptcy
Noneconomic activities. Input tax incurred in relation to noneconomic activities is not recoverable in Jordan.
G. Recovery of ST by non-established businesses
Input tax incurred by non-established businesses that are not registered for ST in Jordan is not recoverable.
H. Invoicing
ST invoices. Invoices must be issued for sales exceeding one Jordanian dinar (JOD). The invoice must be issued on the date the sale/supply is made. As mandated by the Tax Invoicing Regulations, there should be three copies of the issued invoice. One copy should be issued to the Jordanian customer as per the requirements above. The other invoice copies should be maintained internally by the registered person for bookkeeping purposes.
Credit notes. Credit notes are issued when an issued invoice must be amended or canceled; examples include when customers return purchased goods fully or partially, when a customer changes their initial order or an incorrect amount has been reflected on the invoice.
Electronic invoicing. Electronic invoicing is allowed in Jordan, but not mandatory.
Scope of electronic invoicing. For B2B, B2C and business-to-government (B2G) supplies, electronic invoicing is mandatory in Jordan. There is no threshold beyond which taxable persons are required to adopt electronic invoicing in Jordan. The requirements related to electronic invoicing are the same as those for paper invoicing.
As per Regulations No. 34 of 2019, as amended by Regulations No. 13 of 2023, a national electronic invoicing platform was introduced, and it is mandatory that the issuance of invoices by taxable persons for all supplies (B2G, B2B and B2C) be linked to the ISTD’s platform. The ISTD
is enforcing compliance with electronic invoicing, mandating that taxpayers register and issue invoices through its e-invoicing platform and subjecting those who fail to comply to penalties.
Simplified ST invoices. There are no simplified ST invoice rules in Jordan. Self-billing. Self-billing is not allowed in Jordan.
Proof of exports. The original invoice and customs declaration of exported goods stamped by the Customs Center; and the original invoice, related contract and proof of transfer related to exported services are required as proof of exported goods and services, respectively.
Foreign currency invoices. Foreign currency invoices are accepted. However, the value must be converted into the domestic currency, which is the Jordanian dinar (JOD), according to the exchange rate at the time of supply.
Supplies to nontaxable persons. There are no special invoicing rules for supplies to nontaxable persons in Jordan. As such, full ST invoices are required.
Records. In Jordan, examples of what records that must be held for ST purposes include tax returns, invoices, notes and other related reporting obligations.
In Jordan, ST books and records can be kept outside of the country. There are no specifications on where the records must be kept.
Record retention period. Company records must be kept for a period of 10 years. ST records must be kept for a period of four years from the date of submission of the ST return.
Electronic archiving. Electronic archiving is allowed in Jordan. Records can be stored either electronically or physically. However, they must be easily accessible and made available if requested by the tax authorities during ST audits.
I. Returns and payments
Periodic returns. ST must be declared to the ISTD through a bimonthly electronic ST return due within 30 days following the end of every two-month period. SST must be declared to the ISTD through a monthly electronic SST return due within 30 days following the end of every month.
Periodic payments. ST must be paid within 1 month following the end of every two-month period. SST must be paid within 1 month following the end of every month. Payments must be made electronically using the ISTD’s online portal.
Electronic filing. Electronic filing is mandatory in Jordan for all taxable persons. Taxable persons are required to register and submit ST returns electronically on the ISTD’s official website (www. istd.gov.jo).
Payments on account. Payments on account are not required in Jordan.
Special schemes. No special schemes are available in Jordan. However, the ISTD can agree to grant exceptions on a case-by-case basis.
Annual returns. Annual returns are not required in Jordan.
Supplementary filings. No supplementary filings are required in Jordan.
Correcting errors in previous returns. Any errors in previous ST returns can be corrected by submitting an amended ST return in person at the ISTD. An amended ST return can be submitted any time before the issuance of a tax audit notification for the same period. Once a tax audit notification is issued by the ISTD for a specific reporting period, an amended ST return can no