Jordan's Income Tax Law punishes anyone who commits an act of tax evasion with a compensatory fine equal to the tax difference, adding imprisonment for repeat offenses, while requiring the Department to publish final court rulings issued in tax evasion cases.
What acts constitute tax evasion?
A compensatory fine equal to the tax difference is imposed on anyone who evades tax, attempts to evade it, or assists or incites another to evade tax, by committing any of the following acts: filing a tax return based on fabricated records or documents, or including in it data contrary to what is established in records or documents the taxpayer knowingly concealed; filing a return on the basis that no records exist while including data contrary to what is actually established; intentionally destroying records or documents before the legally required retention period expires; fabricating or altering purchase or sale invoices to mislead the Department about reduced profits or increased losses; concealing an activity, or part of it, that is subject to tax; withholding tax and failing to remit it to the Department within thirty days from the date it was paid; or failing to issue a proper invoice.
Imprisonment for repeat offenses
In addition to the compensatory fine, imprisonment is imposed for repeat commission of any of these offenses: imprisonment of not less than four months and not more than one year for a second offense, imprisonment of not less than one year and not more than two years for a third offense, and imprisonment of not less than two years and not more than three years for a fourth offense and beyond. The court may not apply discretionary mitigating grounds with respect to the penalties for the third and fourth-or-more offenses.
Illustrative example
- Suppose a taxpayer evaded tax with a difference of 4,000 dinars by concealing a taxable activity; the compensatory fine due would likewise equal 4,000 dinars (equal to the tax difference), regardless of any imprisonment imposed for repetition. These are hypothetical figures for illustration only.
Publishing court rulings and the limitation period
Notwithstanding any other legislation, the Department must publish final court rulings issued in tax evasion cases in newspapers and the media, including publication through available electronic means. The limitation period for offenses committed in violation of the Income Tax Law and the penalties imposed under it is three years.
The chartered accountant's responsibility
A chartered accountant bears responsibility for certifying financial statements that are materially inconsistent with reality or that violate the provisions of the Income Tax Law or international accounting standards.
Legal References
- Income Tax Law No. 34 of 2014 and its amendments — Article 66 (acts of tax evasion and their penalties)
- Income Tax Law No. 34 of 2014 and its amendments — Article 67 (chartered accountant's responsibility)
For questions about your specific situation, you can ask the Jordan Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.