A furniture supplier in Amman issues an invoice for JOD 4,000, adds 16%, and bills the customer JOD 4,640. In the same month the supplier sells assistive equipment for people with disabilities and adds 16% to that too. Two months later the accountant finds that the second item sits under a reduced rate, that the business over-collected from its customer, and that the wrong figure already went into a filed return. Nothing was wrong with the multiplication. Everything was wrong with the rate chosen before it.
General sales tax in Jordan is not one number applied to everything. It is one standard rate, five reduced rates, a special rate on one sector, a second excise-type tax stacked on top of specific goods, and two completely different treatments for exempt supplies and zero-rated supplies. Businesses that understand the structure issue a correct invoice the first time. Businesses that treat the tax as a single percentage pay the difference later, either in cash or in credibility with their customers.
What general sales tax is and who administers it
General sales tax (GST) is a consumption tax collected when goods are sold or services are supplied. The final consumer bears it; the business acts as a collection agent for the state. Its legal basis is the General Sales Tax Law No. 6 of 1994 and its amendments, the most significant being Law No. 29 of 2009. Article 6 sets the standard rate and Article 13 sets the registration thresholds.
The administering authority is the Income and Sales Tax Department (ISTD) under the Ministry of Finance, the same body that runs Jordan’s national e-invoicing system, JoFotara. That overlap is deliberate. ISTD sees what you sold through the invoices that pass through the system, which makes the rate on your invoice and the figures in your return two views of a single process rather than two separate exercises.
One naming point is worth pausing on. Many businesses call it “VAT” out of habit or from working in neighbouring markets. The legal name in Jordan is general sales tax. It operates on a mechanism close to VAT, because tax paid on purchases can be offset against tax charged on sales, but the name, the law, and the rates are specifically Jordanian. Using the wrong label on an invoice, a contract, or a return invites questions you do not need.
Jordan’s general sales tax rates in full
Anyone asking about general sales tax in Jordan expects a single figure. The honest answer is a table. The standard rate is 16% and it covers most goods and services. Everything below that is a defined exception set out in schedules annexed to the law, and those schedules are amended from time to time, so the practical rule is to check the current schedule when you add a new product rather than working from memory.
| Tax treatment | Rate | Examples of what it covers |
|---|---|---|
| Standard rate | 16% | Most goods and services: retail, wholesale, professional services, software, furniture, equipment |
| Reduced rates | 1%, 2%, 4%, 5%, 10% | Named items in annexed schedules, including hygiene gloves, table salt and pencils, oils and ghee, assistive supplies for people with disabilities, veterinary medicines, corn, live animals and cheese |
| Special rate on telecom | Approximately 24% | Specified telecommunications services |
| Zero-rated | 0% | Exports of goods and services, supplies to free zones, development areas, the Aqaba Special Economic Zone, and duty-free shops |
| Exempt | No tax charged and no input recovery | Bread, education, health services and health insurance, land and residential property, electricity, tea and sugar, gold, air transport |
| Aqaba Special Economic Zone | 7% on specified goods and services | A separate treatment inside the zone under its own lists |
The costliest mistake in this table is not confusing 16% with 4%. It is confusing the last two treatments with each other. Zero-rated and exempt supplies both produce an invoice showing no tax amount. The difference never appears on the invoice. It appears in your return.
Four tax treatments decide what you add to a Jordanian invoice
Exempt versus zero-rated: a difference the invoice never shows
Put two invoices side by side, one for an exempt supply and one for a zero-rated supply, and the tax amount reads zero on both. The difference surfaces the moment you try to recover the tax you paid on your own purchases.
- Zero-rated means the supply is taxable at a rate of zero. Because it is taxable, your right to input tax recovery on related purchases survives. A Jordanian exporter charges nothing on the sale and still recovers the tax paid on production inputs.
- Exempt means the supply sits outside the scope of the tax. You charge nothing on your output and, in return, you cannot recover the tax on purchases attributable to that activity. The tax becomes a cost that has to be priced in. This is the distinction behind exempt supplies in any consumption-tax system.
That difference reshapes the economics of an entire business line. An exempt education provider pays 16% on equipment and furniture and recovers none of it, so the tax becomes a capital cost. A manufacturer exporting at zero rate recovers the tax paid on raw materials. Recording both activities the same way in the books produces a wrong return and forfeits money you were entitled to claim.
Because many businesses sell taxable and exempt items at the same time, keeping purchases attributable to each activity separate is a requirement rather than good practice. Partial recovery is calculated on an apportionment basis, and you cannot apportion what you never separated. In practice this is what double-entry bookkeeping discipline buys you at filing time.
Special sales tax: a second layer on top
On a defined list of goods, special sales tax is applied on top of general sales tax rather than instead of it. The list covers tobacco and tobacco products, alcoholic drinks including beer, wine and spirits, cars, fuel and mineral oils, and cement.
The practical effect on your invoice is simple in form and easy to get wrong in execution. Calculate the special tax on the item under its own category, then calculate general sales tax, and show each amount in its own place. A business selling these goods that charges only 16% issues an understated invoice. A business that charges the special tax and forgets the general one makes the opposite error.
There is a second consequence that often gets missed: manufacturers of goods subject to special sales tax have a different registration threshold, far lower than everyone else’s. The thresholds section below sets it out.
How to calculate general sales tax on a Jordanian invoice
The calculation itself is one multiplication. The work sits entirely before it: identifying the tax treatment of the line, and identifying the base you multiply.
The order of calculating general sales tax across invoice lines
Example one: a standard-rated invoice
A technology services firm in Amman issues a consulting invoice for JOD 2,500 to a local client:
- Tax base: JOD 2,500
- General sales tax: 2,500 × 16% = JOD 400
- Invoice total: JOD 2,900
Example two: one invoice, two different rates
A retailer bills, on a single invoice, JOD 1,200 of standard-rated equipment and JOD 800 of assistive supplies for people with disabilities at a reduced 4% rate:
- Tax on the first line: 1,200 × 16% = JOD 192
- Tax on the second line: 800 × 4% = JOD 32
- Total tax JOD 224, invoice total JOD 2,224
Had the retailer applied 16% to both lines, the tax would have been JOD 320, over-collecting JOD 96 on a single invoice. Multiply that by your monthly invoice count and the case for storing the rate at item level rather than typing it per invoice makes itself.
Example three: the price is advertised tax-inclusive
In retail, the shelf price usually includes tax. To extract the tax from a gross amount, divide by 1.16 and subtract:
- Gross price: JOD 116
- Net of tax: 116 ÷ 1.16 = JOD 100
- Tax amount: JOD 16
The common error is multiplying the gross figure by 16% directly, which returns JOD 18.56 and represents nothing. Reduced rates follow the same rule with their own divisor: 1.04 for 4% and 1.10 for 10%. For a quick check on any rate against any amount before you issue the invoice, the percentage calculator does the arithmetic, and the profit margin calculator helps when you need to see what tax-inclusive pricing does to your margin.
What you actually remit: output tax less input tax
The tax you collect from customers is not your revenue, and the tax you pay suppliers is not a final expense. What you remit to ISTD is the difference between the two. This is the same offset mechanism explained in general terms in our guide to how a consumption tax is calculated, applied under Jordan’s own law and rates.
Here is one filing period for a registered trading business:
| Item | Net value | Tax |
|---|---|---|
| Standard-rated sales | JOD 60,000 | JOD 9,600 (output tax) |
| Taxable purchases and expenses | JOD 41,000 | JOD 6,560 (input tax) |
| Payable to ISTD | Not applicable | JOD 3,040 |
Three conditions govern input recovery: the business must be registered, the purchases must relate to a taxable or zero-rated activity rather than an exempt one, and you must hold a compliant invoice issued through the national e-invoicing system. The third condition is the one that catches businesses out. A handwritten invoice or a PDF from a supplier who is not connected to the system is not a valid document for recovery, so the lost credit becomes a direct cash loss. Reviewing supplier invoices has become part of tax control, not just an accounting formality, and it is why the format of a tax invoice now matters as much as its arithmetic.
When something is wrong after issuance, the correction is not an edit. You issue a return invoice that functions as a credit note, and its value and tax are deducted in the period in which it was issued. Getting the underlying tax base right the first time is considerably cheaper, which is one reason many Jordanian businesses reach the point described in when to stop managing invoices in Excel.
When registration becomes mandatory
Registration is not optional above a certain size, and the threshold depends on what you sell. Article 13 ties the obligation to annual taxable sales and sets a separate ceiling for each type of activity.
Six thresholds that decide when you register for general sales tax
Thresholds are measured against annual taxable sales. Track the figure monthly, because late registration almost always has one cause: nobody was watching it.
- JOD 30,000 for service providers
- JOD 75,000 for sellers of goods not subject to special sales tax
- JOD 10,000 for manufacturers of goods subject to special sales tax
- No threshold for importers, who register within 30 days of the first import
- Multiple activities: the lowest applicable threshold governs
- Voluntary registration is available below the threshold under Article 14
The fifth line is the one that catches business owners. A company that sells goods and provides installation alongside them does not get the comfortable goods threshold. It gets the lowest threshold across its activities. A contractor selling materials and providing execution services falls under the JOD 30,000 services ceiling, and may well have crossed it in the first quarter without noticing.
The sixth line matters if you sell to large companies. Voluntary registration below the threshold gives you the right to recover input tax and makes your invoice acceptable to registered customers, which in many cases outweighs the administrative cost. The decision comes down to one comparison: is the input tax you would recover greater than the cost of filing and record-keeping?
The tax number: two different numbers, not one
ISTD issues the tax registration number through its e-portal, and it is worth knowing that a GST registration number is seven digits while a personal tax identification number is ten. The number is a mandatory field on a Jordanian tax invoice and in every submission to the national e-invoicing system, so an incorrect entry in your company profile means rejected invoices from the first day of integration.
Selling into Jordan and out of it
This section matters to two groups: Jordanian businesses that export, and businesses outside Jordan selling to Jordanian customers.
- Exporting from Jordan: exports of goods and services are zero-rated, so you issue an invoice with no tax amount while keeping your input recovery. Supplies to free zones, development areas, the Aqaba Special Economic Zone and duty-free shops receive the same treatment.
- Selling to a Jordanian business from abroad: the Jordanian business recipient self-accounts for the tax under the reverse-charge mechanism, so the foreign supplier is not required to register in Jordan for that transaction.
- Selling to Jordanian consumers from abroad: a non-resident supplier can register on ISTD’s platform for non-resident e-commerce to charge and remit the 16%, and the JOD 30,000 services threshold applies to non-residents as well. No branch is required, and a tax representative is available as an option rather than an obligation.
The practical takeaway for anyone selling software or digital services across the border: the nature of the customer decides who accounts for the tax, not where the server sits or where the company is incorporated. A tax exemption in your home market has no bearing on it either.
Six recurring mistakes in calculating general sales tax
- Applying the standard rate to everything. The easiest approach and the most expensive. You over-collect from your customer and report tax on a line that does not carry that rate.
- Treating exempt and zero-rated supplies identically. The invoices look the same, but the right to recover input tax is not. The error hides in the return, not in the invoice.
- Multiplying a tax-inclusive price by the rate. The base here is extracted by dividing by 1.16, not by multiplying by 16%. Get this wrong and every retail invoice you issue is wrong.
- Ignoring special sales tax on the goods that carry it. Special tax does not replace general sales tax, it is added before it. Selling fuel, tobacco or cement on a single rate produces an understated invoice.
- Claiming input tax on a non-compliant invoice. A supplier who does not issue through the national system hands you a document you cannot use. The fix is a purchasing condition agreed with suppliers up front, not a scramble at filing time.
- Checking the registration threshold once a year. The threshold is measured against actual sales, and you may cross it in month seven without knowing. Monthly monitoring of taxable sales is what prevents a late-registration surprise, and it is the discipline that a tax return exposes when it is already too late.
Five of these six mistakes have one root cause: the rate is typed manually on each invoice instead of being stored against the item. The remedy is organisational before it is technical, but the system is what makes it stick.
How Qoyod helps you manage general sales tax
Qoyod is set up for the Jordanian market at the level of tax, currency and documents, not translation alone:
- Tax treatment at item level. You set each product or service once as standard-rated, reduced-rated, zero-rated or exempt. From then on it applies automatically on every invoice, which ends the manually typed rate.
- Jordanian tax label and currency. In Qoyod for Jordan the label is “general sales tax 16%”, and the currency is the Jordanian dinar across invoices, reports and financial statements.
- Jordanian invoice template. Tax number and company details, net, tax and gross shown on separate lines, and the QR code returned by the national e-invoicing system after clearance.
- Direct integration with the national e-invoicing system. Qoyod is integrated with JoFotara, so the invoice is submitted, cleared and printed with its code from the same screen that issued it, with no double entry into a separate portal.
- Every document type the system defines. Income invoice for the unregistered, general sales tax invoice for the registered, special tax invoice, and the return invoice that corrects what has already been issued.
- Output and input tax reports. What you collected and what you paid over any period, which is the figure your return is built on instead of assembling it from scattered files.
- Full accounting, not invoicing alone. Journal entries, inventory, receivables and financial statements in the same system. It is cloud-based with no installation, has a mobile app, and support is available 24 hours a day, seven days a week.
For the full picture of connecting to the system, the national e-invoicing page walks through the steps and document types.
Start your free trial and apply the correct sales tax rates
Frequently asked questions about general sales tax in Jordan
What is the sales tax rate in Jordan?
The standard rate is 16% on most goods and services. Reduced rates of 1%, 2%, 4%, 5% and 10% apply to items named in schedules annexed to the law, a special rate of approximately 24% applies to specified telecommunications services, exports are zero-rated, and a defined list of supplies is fully exempt.
Is Jordan’s general sales tax the same as VAT?
Not in name or in law. Jordan levies general sales tax under Law No. 6 of 1994. It operates on a mechanism close to VAT because tax on purchases can be offset against tax on sales, but it is not the same label or the same rate as the systems in neighbouring markets. Use “general sales tax” on every Jordanian document.
How do I extract the tax from a tax-inclusive price?
Divide the gross amount by 1.16 to get the net, and the difference is the tax. A gross amount of JOD 232 means JOD 200 net and JOD 32 tax. For reduced rates, use the matching divisor, for example 1.04 for a 4% rate.
When do I have to register for general sales tax in Jordan?
When your annual taxable sales cross your activity’s threshold: JOD 30,000 for services, JOD 75,000 for goods not subject to special sales tax, and JOD 10,000 for manufacturers of goods subject to special sales tax. Importers register with no threshold within 30 days of their first import. If you have more than one activity, the lowest threshold governs.
What is the difference between exempt and zero-rated supplies?
Both produce an invoice with no tax amount. Zero-rated supplies are taxable at zero, so you keep the right to recover related input tax. Exempt supplies are outside the scope, so there is no input recovery and the tax you paid on purchases becomes a cost.
Does special sales tax replace general sales tax?
No. Special sales tax is added on top of general sales tax on specific goods such as tobacco, fuel, cars and cement. Both amounts appear in their own place on the invoice.
Do I need to invoice through the national system if I am not registered for sales tax?
Yes. The e-invoicing obligation is broader than sales tax registration. An unregistered business issues an income invoice with no tax, but it still passes through the system.
Can I recover input tax if my supplier is not connected to the system?
Recovery requires an acceptable document, and the invoice issued through the national e-invoicing system is the accepted one. This is why many buyers now require suppliers to issue through the system as a condition of purchase rather than an afterthought.
The practical takeaway
General sales tax in Jordan is not a number to memorise. It is a decision you make for every item you sell: which tax treatment it deserves, whether it also carries special tax, and whether it earns you input recovery. Make that decision once per item and store it in your system, and every invoice after it is correct by default.
Then watch one figure every month: taxable sales year to date against your activity’s threshold. That figure determines when you must register, and it is the one most often ignored. Filing a tax return is straightforward when the number was in front of you all year rather than assembled at the end of it.
