Jordan: Worked Example of Tax on Rent

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Tax Example: Rent

Non-resident couple's joint monthly rental income1		US$1,500	US$6,000	US$12,000
Annual Rental Income		18,000	72,000	144,000
Less Costs2		(2,932)	(9,728)	(16,456)
Less Depreciation3		(2,400)	(13,091)	(28,800)
= Taxable Income		12,668	49,181	98,744
Less 15% Exemption4		(1,900)	(7,377)	(14,812)
= Net Taxable Income		10,768	41,804	83,932
Income Tax Rates
Up to JOD2,000	5%	282	282	282
JOD2,000 – JOD6,000	10%	512	1,130	1,130
JOD6,000 – JOD14,000	20%	-	4,516	4,516
Over JOD14,000	25%	-	570	11,102
= Annual Income Tax Due		US$794	US$6,498	US$17,030
Additional Tax
Social Service Tax5	10%	80	650	1,703
= Annual Tax Due		US$874	US$7,148	US$18,733
Deduction
Real Estate Tax6		(1,440)	(5,760)	(11,520)
Annual Income Tax Due		US$566	US$1,388	US$7,213
Tax Due as % of Gross Income		nil	1.93%	5.01%
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on March 19, 2007.

Notes

Arab Professionals Co is a member firm of Grant Thornton International. Grant Thornton International is not a worldwide partnership. Member firms of the international organization are independently owned and operated.

¹ The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner). Exchange rate used: JOD 1 = US$ 1.41147.

² Estimated costs. Maintenance and repairs, salaries, and sewer contribution are all deductible.

³ Estimated values.

⁴ The tax-exempt amount for other areas in Jordan is 30% of the net rental income.

⁵ The 10% social service tax is levied on the income tax liability.

⁶ The real estate tax is computed as follows = [annual rental income x 80%] x 10%.

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