Calculate the VAT on your amount quickly using the default **16% VAT rate in Jordan**.
The **Value Added Tax (VAT)** is a consumption-based tax introduced by the Jordanian government on **January 1, 2001**. It is applied to most goods and services, with exemptions or zero-rated items as specified by the Jordanian Tax Department. The current **VAT rate in Jordan is 16%**, meaning that for every taxable product or service, an additional 16% is added to its price.
The introduction of VAT was part of Jordan's broader strategy to increase government revenues, reduce reliance on external financial aid, and promote economic sustainability. The revenue generated from VAT is used to fund essential public services such as infrastructure, healthcare, education, and social programs that benefit the country's citizens and residents alike.
VAT is a **tax on consumption**, meaning it’s ultimately paid by the end consumer. When businesses sell goods or services, they charge VAT on top of the sale price. However, businesses are able to **recover the VAT** they pay on their own purchases, making VAT a tax that is ultimately passed on to the final consumer.
For example:
Not every business in Jordan is required to register for VAT. The government has set thresholds based on annual revenue. Businesses with taxable supplies exceeding **JOD 75,000** per year are required to register for VAT.
However, businesses with taxable supplies between **JOD 35,000** and **JOD 75,000** can opt for **voluntary registration**. This flexibility allows smaller businesses to register for VAT and recover the VAT they pay on their own expenses.
Additionally, businesses that only provide VAT-exempt services or whose supplies are outside the scope of VAT are not required to register.
VAT offers numerous benefits to the Jordanian economy. The primary advantage is **economic diversification**. By introducing VAT, Jordan has been able to generate non-oil revenue, helping to reduce reliance on aid and strengthen the country’s fiscal position. This has allowed the government to invest in long-term economic growth and sustainable development.
Furthermore, VAT brings more **transparency** to the economy. With a clear tax system in place, businesses and consumers are more aware of the costs and taxes associated with products and services. This fosters a competitive environment and encourages businesses to maintain accurate financial records.
The Jordanian government has exempted certain goods and services from VAT, meaning that no VAT is charged on these transactions. Some key **VAT-exempt** sectors include:
In addition, there are **zero-rated** goods and services, which means that VAT is applied at a 0% rate, allowing businesses to reclaim VAT on inputs. Some examples include:
The VAT calculation is simple and follows this formula:
VAT = Amount * VAT Rate
To calculate the VAT on a given amount, multiply the price of the goods or services by the VAT rate (16% in Jordan).
**Example**:
If you are purchasing a product worth **JOD 500**, the VAT would be:
500 * 16% = JOD 80
So, the total cost for the product will be **JOD 580**.
To help with VAT calculations, many businesses and individuals use online **VAT calculators**. These tools automatically compute the VAT amount based on the entered price, making the process much easier.
A: You can use our **Jordan VAT Calculator** to quickly calculate VAT on any product or service in Jordan. Simply enter the amount and the default VAT rate of 16%, and the tool will show you the VAT amount and the total cost after VAT.
A: The current VAT rate in Jordan is **16%**, which was introduced on **January 1, 2001**. It is applied to most goods and services in the country, except for specific exemptions and zero-rated goods.
A: To calculate VAT, multiply the price of the product by the VAT rate (16%). For example, for a product priced at **JOD 100**, the VAT would be **100 * 16% = JOD 16**. The total price after VAT would be **JOD 116**.
A: Yes! The Jordan VAT calculator allows you to calculate VAT for multiple items by entering each item’s price and applying the VAT rate to each one separately, or adding them together for a cumulative VAT calculation.
A: The default VAT rate in Jordan is **16%**, but the calculator can be adjusted to different VAT rates if necessary (e.g., for future changes or special VAT rates in specific regions). You can manually change the VAT rate in the calculator to suit your needs.
A: VAT is a consumption tax applied to most goods and services in Jordan. It was introduced as part of the government's broader strategy to increase revenue and reduce reliance on external financial aid. The VAT revenue helps fund essential public services such as healthcare, education, and infrastructure.
A: VAT is applicable to most goods and services in Jordan, but certain items are exempt or zero-rated. For example, basic food items, healthcare, education, and certain financial services are either exempt or subject to a 0% VAT rate.
A: If you are a business in Jordan, you are required to charge VAT on the goods and services you sell. You can recover the VAT you paid on business purchases and expenses through input VAT credits. Be sure to file your VAT returns regularly with the **Jordan Tax Department**.
A: Companies in Jordan are subject to a corporate tax rate of **14%** on their earnings. Tax returns must be filed by **April 30th** each year. Failure to do so may result in a fine of up to 80% of the amount due.
A: Dividends distributed to both resident and foreign parent companies are **exempt from both corporate tax and withholding tax** in Jordan.
A: Capital gains earned through the sale of shares and other securities are **fully exempt from tax** in Jordan, provided they are not realized by a bank or financial institution.
A: Interest and royalties paid to a non-resident are subject to a **7% withholding tax**, unless reduced by a tax treaty.
A: Employers in Jordan are required to pay social security contributions at a rate of **12.5%** of employees' gross salary, with a maximum contribution of **US$850 per employee** per year. Additionally, employees must contribute **6.5%** of their net salary for social security. Employers also withhold payroll tax at rates of up to **14%** from employees' gross salaries.
A: Yes, Jordan has signed **double taxation avoidance agreements** with 35 countries, including Canada, France, India, Indonesia, Malaysia, Qatar, and the United Kingdom.
