As of 20 August 2026, the Jordanian Ministry of Finance published Official Gazette No. 6068, introducing comprehensive amendments to the Value-Added Tax Implementing Regulation. These amendments constitute a strategic overhaul of Jordan’s indirect tax regime, aiming to modernize compliance frameworks, align national statutes with OECD Pillar Two global minimum tax standards, and fortify digital invoicing infrastructure for multinational enterprises and local businesses operating within the Hashemite Kingdom. The regulatory updates emanate from Jordan’s adherence to international tax transparency initiatives, including the OECD/G20 Inclusive Framework, and provide a staggered implementation timeline permitting taxpayers to revamp accounting protocols, upgrade enterprise resource planning systems, and retrain personnel. Legal underpinnings reference Article 45 of the Jordanian Tax Law No. 34 of 2014, as modified by Executive Bylaw amendments published in Regulation No. 87 of 2026, alongside Cabinet Decision No. 12 of 2026 authorizing the Tax Bureau’s enhanced enforcement powers. The amendments take effect immediately upon publication, with specific provisions phased between 1 March 2026 and 1 January 2027, thereby granting a twelve-month transition period for full e-invoicing adoption.
Key Takeaways
- Mandatory E-Invoicing Integration and Digital Compliance: All taxable persons registered under Jordan’s VAT regime are required to migrate to certified electronic invoicing solutions compliant with the Tax Bureau’s technical specifications by 1 January 2027. A mandatory pilot phase commences 1 March 2026, covering enterprises with annual turnover exceeding JD 5 million, mandating real-time transmission of invoice data to the Tax Administration’s central server. Non-compliance penalties escalate from written warnings to monetary fines of up to 5% of the declared tax liability per infraction quarter, with repeat offenders subject to audits and potential suspension of electronic clearance permits. The e-invoicing system must incorporate advanced encryption, digital signatures meeting ISO/IEC 27001 standards, and integration with the existing VAT return filing portal to facilitate automatic input tax verification.
- Fortified Input Tax Deduction Regime and Record-Keeping Obligations: The revised regulation tightens criteria for input tax recovery, now requiring that all deduction claims be substantiated by electronically validated supplier VAT identifiers verified through the Tax Bureau’s online verification gateway. Enterprises must preserve complete, unaltered transaction records—including sales invoices, purchase receipts, and accompanying contracts—for a minimum retention period of seven years, extended from the prior five-year mandate. Failure to produce adequate documentation during a tax audit triggers automatic disallowance of the contested input tax, with additional interest charges at the prevailing statutory rate of 15% per annum on underpaid amounts. The regulation also introduces a presumptive tax adjustment mechanism for transactions lacking validated e-invoices, reinforcing the principle of self-assessment with administrative oversight.
- OECD Pillar Two Undertaxed Profits Tax (UPT) Implementation: In direct response to OECD Pillar Two directives, Jordan enacted a domestic Undertaxed Profits Tax applicable to multinational enterprise groups whose annual global revenue surpasses EUR 750 million and which maintain a permanent establishment or taxable presence in Jordan. The UPT rule applies to fiscal years commencing on or after 1 January 2027, obligating affected groups to compute the global anti-abuse rule (GAAR) and subject-to-tax rule (STR) calculations annually. Companies must file a supplementary UPT return with the Tax Bureau within 12 months of fiscal year-end, detailing excess profits, calculated undertaxed amounts, and corresponding tax payments. Transfer pricing documentation must be updated to reflect Pillar Two adjustments, and entities are advised to conduct intra-group benchmarking analyses to preemptively assess potential UPT liabilities.
Disclaimer:This article is compiled and summarized based on publicly available information and is for general information and academic exchange purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. For tax planning, please consult a qualified professional tax advisor or legal counsel.
Source: Read Original Announcement