Residents are taxed only on their Jordan-sourced income. Married couples are generally taxed separately but they may elect for joint taxation.

INCOME TAX

Taxable income is classified into two categories: (1) employment income and (2) business income.

Employment Income Tax

Employment income is taxed at progressive rates.

Zakat

Muslims must pay zakat, which may be deducted from their taxable employment income up to a maximum of 25%. Jordan does not levy any zakat on businesses.

Residents are entitled to the following deductions:

• JOD12,000 (US$8,571) for every taxpayer
• JOD12,000 (US$8,571) for non-working spouse
• JOD12,000 (US$8,571) for each dependent child

Corporate Income Tax

Taxable business income includes the gains or profits from any work, craft, business, profession or vocation, which may be considered as trade or business. Taxable profits include: (1) interests, discounts, exchange gains and commissions, (2) any obligation or annuity, (3) income or rent and other profits from movable and immovable property, (4) capital gains from the disposal of immovable property during the course of a business and from the disposal of property acquired on or after 01 November 1989.

The applicable tax rates depend on the nature of business activity or the source of business income. Companies are generally subject to corporate income tax at a flat rate of 20%.

RENTAL INCOME
Rental income is considered business income and is subject to corporate income tax.

CAPITAL GAINS
Capital gains realized from selling personal property are not taxed in Jordan.

Capital gains earned from selling properties during the course of a business are subject to corporate income tax.

PROPERTY TAXATION

Real Property Tax

Property tax is a municipal tax levied at 15% on the estimated annual rental value of the property. The estimated rental value is assessed every five years by the tax authorities. Property tax may be set off against the taxpayer´s income tax liability.