Jordan's Income Tax Law No. 34 of 2014 subjects an individual's taxable income to six progressive brackets ranging from 5% to 30%, applied after deducting the personal exemption, the dependents' exemption, and the additional exemptions granted for treatment, education, rent, and housing loan interest.
Progressive Income Tax Brackets for Individuals
Article 11 of the Income Tax Law provides that tax is collected from a natural person's taxable income according to the following rates, with each rate applying only to its own bracket rather than to the whole income:
- 5% on each dinar of the first five thousand dinars.
- 10% on each dinar of the next five thousand dinars.
- 15% on each dinar of the next five thousand dinars.
- 20% on each dinar of the next five thousand dinars.
- 25% on each dinar thereafter up to one million dinars.
- 30% on each dinar of taxable income exceeding one million dinars.
Personal Exemption and Dependents' Exemption
Before tax is calculated under the brackets above, Article 9 of the Law provides that to arrive at taxable income, a resident individual taxpayer is allowed a deduction of nine thousand dinars as a personal exemption, and a further nine thousand dinars for dependents regardless of their number, effective from the year 2020 onward.
Additional Exemptions for Treatment, Education and Rent
The Law grants the individual and dependents additional exemptions against expenses for treatment, education, rent, and housing loan and murabaha interest, as follows:
- One thousand dinars for the taxpayer.
- One thousand dinars for the taxpayer's spouse.
- One thousand dinars per child, up to a maximum of three thousand dinars.
The Law requires that the total of the personal exemption and the dependents' exemption granted to the taxpayer and those they support not exceed 23000 dinars in all cases. A joint tax return for spouses, or a joint assessment decision, may not be filed or issued except with the consent of both spouses.
Special Rules for Non-Residents and Female Breadwinners
A non-resident Jordanian individual may benefit from the exemptions for dependents residing in the Kingdom if that individual actually supports them. Article 9 also grants a female breadwinner taxpayer the right to the dependents' exemption, and where more than one supporting taxpayer applies for this exemption for the same dependents, the exemption is divided among them according to the actual share of support.
Illustrative Example of Progressive Tax Calculation
Illustrative example: if a resident individual's taxable income, after deducting exemptions, amounted to twenty thousand dinars a year, the tax would be calculated progressively so that 5% applies to the first five thousand dinars, then 10% to the next five thousand, then 15% to the next five thousand, then 20% to the last five thousand, rather than applying the highest rate to the whole amount.
Legal References
- Income Tax Law No. 34 of 2014 — Article 11(a) (individual income tax brackets).
- Income Tax Law No. 34 of 2014 — Article 9 (personal exemption, dependents' exemption, additional exemptions, and rules on joint returns, non-residents and female breadwinners).
For questions about your specific situation, you can ask the Jordan Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.