If a taxpayer in Jordan fails to pay or remit the tax due on time, the Income and Sales Tax Department collects a late-payment fine of four per thousand of the outstanding tax balance for each week of delay or part thereof, provided total fines never exceed the tax amount itself.
How is the late tax payment fine calculated?
The Income Tax Law provides that where tax is not paid or remitted by the specified deadlines, the Department collects a late-payment fine of four per thousand of the outstanding tax balance, or of any amounts required to be withheld or remitted, for each week of delay or part of a week. Subject to this rule, fines may in no case exceed the amount of the tax itself.
Illustrative example of the fine calculation
- Suppose a taxpayer delays paying an outstanding tax balance of 1000 dinars for two full weeks. The estimated fine at four per thousand per week equals 4 dinars per week, i.e. 8 dinars for the two weeks combined. These are hypothetical figures for illustration only.
Fine on a tax difference found after audit
If a taxpayer files the tax return and pays the declared tax by the deadline, and an audit later reveals an additional tax difference is due, the late-payment fine on that difference is calculated from the date the audit decision notice is served, provided the difference does not exceed five thousand dinars; if it exceeds that amount, the general late-payment rule applies from the original due date of the tax.
Additional charge on installments and on delayed refunds
The Director may, for justified reasons, agree to pay the amount due by installments, but the taxpayer is then required to pay an additional charge on the installment amount at 9% annually. Conversely, if a taxpayer pays an amount exceeding what is due, the Department must refund the excess balance within a period not exceeding thirty days from receiving a written request to that effect; if the Department fails to meet this deadline, it must pay the taxpayer an additional charge of 9% annually.
Collecting unpaid tax
If tax or amounts due are not paid within the periods specified by law, the Department demands payment from the taxpayer within thirty days from notification, and if the taxpayer fails to comply, the amounts are collected under the Public Funds Collection Law. These financial fines are distinct from the penalties prescribed for tax evasion crimes involving fraud, forgery, or concealment of data.
Legal References
- Income Tax Law No. 34 of 2014 and its amendments — Article 36 (weekly four-per-thousand late-payment fine)
- Income Tax Law No. 34 of 2014 and its amendments — Article 37 (9% additional charge on installments)
- Income Tax Law No. 34 of 2014 and its amendments — Article 38 (refund of excess and 9% additional charge)
- Income Tax Law No. 34 of 2014 and its amendments — Article 39 (demanding payment and collecting unpaid amounts)
For questions about your specific situation, you can ask the Jordan Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.