Goods and services sold to free zones, free cities, and free markets, or exported outside the Kingdom, are subject to the general tax at a rate or amount of zero under the General Sales Tax Law, while enterprises registered in development zones and the Aqaba Special Economic Zone are subject to special rules governing their registration and taxation.
Sales to Free Zones: The Zero Rate
The General Sales Tax Law provides for calculating the tax at a rate or amount of zero on goods and services sold to free zones, free cities, and free markets, or exported outside the Kingdom.
Deemed Registration for Enterprises in Development and Free Zones
Under the Instructions on Registration and Deregistration for Sales Tax Purposes at the Development Zones and Free Zones Commission, an enterprise registered in a development zone with the Commission is deemed registered for sales tax from the date of its registration. Likewise, an enterprise registered in a free zone that carries on a service-selling activity is deemed registered for sales tax from the date of its registration with the Commission, without needing separate registration with the Income and Sales Tax Department.
Deregistration in Development Zones
If an enterprise registered with the Commission submits a written application to cancel its registration, its sales tax registration is deemed cancelled from the end of the tax period during which the cancellation application was submitted, provided it undertakes not to benefit from exemptions after submitting the application, files a final tax return, and calculates the tax on the taxable goods in its possession.
A Special Regime for the Aqaba Special Economic Zone
Goods and services listed in a special schedule attached to the System on the Sales Tax of Goods and Services in the Aqaba Special Economic Zone are, when sold for consumption within the zone, subject to their own goods-and-services sales tax, separate from the General Sales Tax. A seller registered for this tax must collect it on every taxable sale, unless the buyer presents a certificate showing that they are registered for the same tax and for the same taxable activity carried on by the seller, and the seller issues an invoice stating the buyer's name and their registration number with the Authority.
Legal References
- General Sales Tax Law No. 6 of 1994 — Article 7
- Instructions on Registration and Deregistration for Sales Tax Purposes at the Development Zones and Free Zones Commission No. 5 of 2012 — Article 3
- Instructions on Registration and Deregistration for Sales Tax Purposes at the Development Zones and Free Zones Commission No. 5 of 2012 — Article 4
- Instructions on Registration and Deregistration for Sales Tax Purposes at the Development Zones and Free Zones Commission No. 5 of 2012 — Article 8
- System on the Sales Tax of Goods and Services in the Aqaba Special Economic Zone of 2005 — Article 3
- System on the Sales Tax of Goods and Services in the Aqaba Special Economic Zone of 2005 — Article 5
For questions about your specific situation, you can ask the Jordan Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.