As of 4 August 2026, the Jordanian Ministry of Finance released Official Gazette No. 6064, promulgating comprehensive reforms to the input tax deduction framework governing the Value-Added Tax system. The amendments seek to curtail abuse, enhance integrity of the tax base, and bring Jordan’s deduction practices into full conformity with OECD/G20 Inclusive Framework recommendations on tax transparency. Key changes include the mandatory real-time validation of supplier VAT identifiers, stricter documentation thresholds for capital goods, and the introduction of a rebuttable presumption rule for transactions lacking electronic invoicing. Legal references encompass Article 38 of the Jordanian Tax Law No. 34 of 2014, as amended by Ministerial Order No. 22 of 2026, and the accompanying VAT Implementing Regulation updates published simultaneously.
Key Takeaways
- Mandatory Real-Time Supplier VAT Validation: All input tax deduction claims must now be accompanied by a validated VAT identification number obtained through the Tax Bureau’s online verification gateway in real time at the point of invoice entry. Transactions where the supplier’s VAT status cannot be confirmed within the system are automatically flagged for review, and the corresponding input tax is disallowed until validation is achieved. The measure is intended to prevent fictitious invoicing, reduce carousel fraud, and enhance compliance among cross-border traders operating within Jordan’s free trade zones.
- Enhanced Documentation Thresholds for Capital Goods and Capital Expenditure: Deduction claims for capital goods, machinery, equipment, and major capital expenditure projects now require submission of detailed technical specifications, asset registers, depreciation schedules, and proof of payment via bank transfer or certified check. The regulation mandates a minimum retention period of ten years for all supporting documentation, up from the previous seven-year requirement, to support long-term audit cycles and transfer pricing reviews. Failure to maintain adequate records triggers automatic disallowance of the claimed deduction and imposes a penalty equal to 7% of the disallowed amount.
- Rebuttable Presumption Rule for Transactions Lacking Electronic Invoices: A new regulatory provision establishes that input tax deductions for business expenses not supported by electronically issued and validated invoices are subject to a rebuttable presumption of ineligibility. Taxpayers may overcome this presumption by presenting alternative evidence of a legitimate business purpose, signed contracts, and bank transfer records, but the burden of proof rests entirely with the taxpayer. The rule applies retroactively to fiscal years commencing on or after 1 January 2026, requiring immediate review of existing deduction claims and adjustment of prior-year tax returns.
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.
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