REGULATIONS AND INSTRUCTIONS

“Issued Pursuant to the Provisions of the Income Tax Law No. (57) for the Year 1985 as Amended”

 Regulation No. (10) for the Year 1986⁽¹⁾

Regulation of Principles of Appeal and

Cassation of Income Tax Cases

“Issued Pursuant to Clause (a) of Paragraph (a) of article (50) of the Income Tax Law No. (57) for the year 1985”

Article (1)

This regulation shall be cited as “Regulation of Principles of Appeal and Cassation of Income Tax Cases for the year 1986” and shall be effective as of the date of its promulgation in the “official gazette”.

Article (2)

a-       Assessment decisions appealable in accordance with the effective Income Tax Law shall be referred to the Income Tax Cases Court of Appeal within thirty days as of the date of conveying the notification of the appealed decision.

b-       The appeal statement shall be submitted to the Income Tax Cases Court of Appeal, or through the President of the regular Court of Appeal or the President of the regular Court of First Instance within whose respective jurisdictions the appellant may be residing. Appeal fees in both latter cases shall be paid to the treasurer’s office of the court through whose president the statement was presented.

c-       If the person who wishes to appeal filed an application for the postponement of appeal fees payment subsequent to the provisions of paragraph (c) of Article (3) of this regulation, the period that starts with the date of filing that application and ends on the day when the court judgement related thereto communicated shall not be computed as part of the period prescribed for filing the appeal.

d-       The Income Tax Cases Court of Appeal may decide to extend the legal period fixed for filing the appeal statement subsequent to a written application made by the appellant within that period if the aforesaid court is convinced of the validity of the reasons stated therein. A copy thereof shall be communicated to the respondent to give him an opportunity to reply to that application.

Article (3)

a-       The appellant shall, upon filing the appeal statement pay a separate fee for each year to the amount of three percent of the difference between the assessed tax payable by him and the sum he admits of that tax, provided that this fee shall not be less than three Dinars in any case including non existence of an assessed tax payable by him owing to the fact that the appellant suffered losses, and provided that the fee shall not exceed one hundred Dinars per each year appealed for, and the appellant shall pay half of this fee upon the renewal of the appeal that has been dropped.

b-       For the purposes of fixing the appeal fee the term “assessed tax” shall mean the tax assessed as payable by the appellant after carrying out the clearing provided for in Article (21) of the Income Tax Law No. (57) for the year 1985.

c-       The Income Tax Cases Court of Appeal may rule that the appeal may be filed without payment of the prescribed fee subsequent to a written application by the appellant within the legal period allowed for filing an appeal if the court is convinced that the appellant has valid reasons that justify the postponement of paying the appeal fee or any part thereof, provided that the respondent be given an opportunity to reply to the reasons stated in the application after communicating to a him a copy thereof.

d-       If the appellant, whose appeal has been accepted without having to pay the prescribed fee, becomes able to pay that fee, and the respondent has proved that during any phase of the trial, the court shall order that its proceedings be suspended, and shall order the appellant to pay that fee within a period fixed by the Court subject to rejection of the appeal.

e-       If the appeal is rejected for any reason whatsoever or dropped, the unpaid fee shall be a debt owed by the appellant to the State’s Treasury as ruled by the Court and shall be duly collected from the appellant by the Execution Department.

Article (4)

a-       The appeal statement shall include:

1-       Name and address of the appellant.

2-       Respondent in his ex officio.

3-       Number and date of the assessment notice and the year of the appealed tax.

4-       Date of communicating to the appellant the appealed assessment notice.

5-       The income tax estimated as payable by him in accordance with the appealed decision and the sum he admits thereof.

6-       Causes of appeal in brief and in separate numbered paragraphs.

7-       What the appellant asks for in his appeal.

b-       The appeal statement must be signed by a practicing lawyer and a copy of the appealed decision need not be attached to it.

Article (5)

If the appellants are partners in an ordinary resident company, each one of them has to file a separate appeal statement and to pay in respect thereof the fee prescribed pursuant to the provisions of this regulation. After having formally accepted these appeals, the court may combine them and give a decision thereon in one judgement.

Article (6)

a-       Judgements that are amenable to cassation shall be filed for cassation in accordance with the provisions of the Income Tax Law in effect within thirty days as of the date of addressing it to thereto in presence or else as from the date of serving same upon him. The cassation statement shall be submitted to the divan of the court of cassation or to the court which issued the judgement or to the president of the regular court of appeal within whose area of jurisdiction the appellant in cassation is residing. The cassation fees shall be paid to the treasury’s office of the court through which the cassation statement was field in the latter case.

b-       In cases where the judgements issued by the Income Tax Cases Court of Appeal cannot be filed for cassation except subsequent to a permission in accordance with the effective Income Tax Law, the applicant for such permission must file his application within ten days as of the date stated in paragraph (a) of this Article to the Income Tax Cases Court of Appeal. If the aforesaid court refuses such permission, the applicant therefor may file such application to the President of the Court of Cassation within ten days as of the date of informing him of the refusal decision. But if it has been decided to grant such permission whether by the Income Tax Cases Court of Appeal or by the President of the Court of Cassation, the appellant in cassation must file the cassation statement within ten days as of the date of communicating the permission approval to him.

c-       If the person who wishes to file an application for cassation has submitted a petition for postponement of the cassation fee pursuant to the provisions of paragraph (c) of Article (7) if this regulation, the period that starts with the date of submitting the petition and ends on the day of communicating the court decision to him shall not be calculated within the cassation period.

d-       The Court of Cassation may decide to extend the legal period prescribed for filing the cassation statement following a written petition submitted by the appellant in cassation within that period if it is convinced of the validity of the reasons stated therein. A copy thereof shall be conveyed to the respondent in cassation to give him an opportunity to respond to that petition.

Article (7)

a-       If the appellant in cassation is the concerned taxpayer, he must, upon filing the cassation statement, pay a fee to the amount of 3% of the difference between the amount of the taxes assessed on him and the amount he admits, provided that such fee shall not be less than five Dinars in any case whatsoever including cases of non-existence of assessed tax because of loss incurred by the appellant in cassation, provided that it shall not exceed one hundred Dinars.

b-       For the purposes of fixing the cassation fee, the term “assessed tax” means the amount of the tax due on the appellant in cassation after carrying out the clearing process provided for in the Income Tax Law No. (57) for the year 1985.

c-       The Court of Cassation may rule that the cassation application be filed without payment of the prescribed fee foa written application made by the appellant in caswithin the legalallowed for filing the cassation application if the court is convinced that the appellant in cassation has valid reasons that justify the postponement of paying the cassation fee, provided that the respondent in cassation be given an opportunity to reply to the reasons stated in the application after communicating to him a copy thereof.

d-       If the appellant in cassation whose cassation petition has been accepted without having to pay the prescribed fee becomes able to pay that fee and the respondent in cassation has proved that during any phase of the trial, the Court shall order that its proceedings be suspended and shall order the appellant in cassation to pay that fee under the penalty of rejecting the cassation petition.

e-       If the cassation petition is rejected or dropped for any reason whatever, the unpaid fee shall be a debt owed to the State’s Treasury by the appellant in cassation, and shall be duly collected by the Execution Department.

Article (8)

a-       The cassation statement shall include:

1-       Name and address or job of the appellant in cassation.

2-       Name and address or job of respondent in cassation.

3-       Number of the case on which the judgement was issued together with a brief summary of the judgement.

4-       Date of communicating the cassated judgement if made in presence to face or the date of communicating if made in a manner tantamount to in presence.

5-       Reasons of contesting the cassated judgement, briefly in separate numbered paragraphs.

6-       What the appellant in cassation requires in his cassation application.

b-       The cassation statement must be signed by a practicing lawyer with a sufficient number of copies thereof to be distributed to all respondents in cassation over and above an additional copy for the court, all of which are certified by the chief clerk of the court of appeal that issued the judgement. However, in cases where one Attorney-In-Law is acting on behalf of more than one respondent in cassation, one copy of the judgement will be sufficient which will be communicated to the Attorney-In-Law on behalf of his concerned clients.

c-       Any cassation whose statement is not accompanied with the copies provided for in paragraph (b) of this article shall be rejected.

Article (9)

a-       Judiciary statements and another judiciary documents pertaining to Income Tax Case Court of Appeal or issued by the same shall be duly communicated in accordance with the effective code of civil procedure.

b-       The respondent in appeal or in cassation may present a rebuttal within fifteen days as of the date of communicating to him the appeal or cassation statement.

c-       If the cassation statement is presented by the Income Tax Cases Court of Appeal, this court shall send the papers of the cassated case to the Court of Cassation after the fees have been paid therefor and after the expiry of the period prescribed for exchange of statements.

Article (10)

a-       With due observance to the provisions of the effective Income Tax Law and the provisions of this Regulation, the Court of Cassation shall apply the provisions of the Code of Civil Procedure in effect.

b-       The Court of Cassation shall see the income tax case specifically referred to it for cassation unless it spontaneously decides otherwise, or subsequent to an application made by either party in the case and approved by the Cassation Court itself.

c-       Having completed the procedures of seeing the cassation, the Court of Cassation shall rule either acceptance or rejection of the cassation; endorsement or reversal of the judgement, or rule by referring the case back to the Income Tax Cases Court of Appeal, in accordance with the powers authorized to it pursuant to law in force.

Article (11)

Charging and assessment of the fees and expenditures of appeal or cassation shall be left to the Court of Appeal or Cassation as the case may be. Upon assessment of such fees and expenditures, the court shall take into account the value of the case, the time it has taken to be decided, the fees paid to the court and other relevant matters. Its decision concerning the fees and expenditures shall be made in accordance with the following:

a-       All the appeal or cassation fees and expenditures shall be borne by the taxpayer if the court’s assessment of the payable income tax is not below the assessment of the assessor, the Minister of Finance or the official delegated by him.

b-       All the appeal or cassation fees and expenses shall be borne by the assessor, Minister of Finance or the official delegated by him if the court’s assessment of the income tax to be paid does not exceed the taxpayer’s assessment.

c-       If the sum assessed by the court for the income tax to be paid ranges between the amount assessed by the assessor, Minister of Finance or the official delegated by him on one hand, and the amount assessed by the taxpayer for that tax on the other side, the fee and expenditures to paid shall be judged according to the proportion of the judged sum to the amount of the tax that has been assessed by the assessor, the Minister of Finance or the official delegated by him, as the case may be.

Article (12)

The Regulation entitled “Regulation of Principles of Appeal and Cassation of Income Tax Cases” No. (47) for the year 1982 shall be repealed.

 Regulation No. (11) for the Year 1986⁽¹⁾

Regulation of Income Tax Deduction from Salaries and Wages

“Issued in Accordance with Provision (2) of Para (a) of Article (50) of Income Tax Law No. (57) of 1985”

Article (1)

This Regulation is entitled (Regulation of Income Tax Deduction from Salaries and Wages for the Year 1986) and shall be enforced from the date of its publication in the official gazette).

Article (2)

The following terms and expressions, wherever they are mentioned in this regulation, shall have the meanings assigned to them as follows unless the contexts indicates otherwise:

Department: Income Tax Department

Director:       Director General of the Department

Employer:    For the purposes of this Regulation an employer is the person responsible for paying any salary or wage on behalf of himself or on behalf of another person.

Salary or Wage:      Any income taxable under provision (2) of para (a) of article (3) of the Income Tax Law No. (57) for the year 1985. It includes the commission paid by the employer to the employee as well as the amount paid in form of obligation or other allocations if these amounts are paid or accrue on monthly basis.

Article (3)

a-       Every person employed for the first time shall submit to his employer two copies of an attested certificate in accordance with the officially approved form (A.R/1). He shall also submit same in cases when a change occurs in respect of the information listed in that certificate and whenever the Director requests him to submit same.

b-       The employer shall submit a copy of the certificate provided for in para (a) of this article to the assessing officer within (10) days of receiving same.

Article (4)⁽¹⁾

a-       The employer, when paying a salary or monthly wage to any of his employees exceeding 1/12 of the total amount of the due exemptions in accordance with the information listed in the certificate provided for in article (3) of this Regulation, shall deduct the tax from that increase according to the following categories:

-        On each Dinar from the first 167 Dinars               50 Fils

-        On each Dinar from the next 167 Dinars              100 Fils

-        On each Dinars from the next 333 Dinars            150 Fils

-        On each Dinar from the next 333 Dinars              200 Fils

-        On each Dinar from the next 333 Dinars              250 Fils

-        On each Dinar in excess of the above                   300 Fils

b-       On payment of annuity or none monthly bonus 10% of the total amount paid shall be deducted.

Article (5)

The employer shall pay the assessing officer before the 14^th day of each month or any other date approved by the assessing officer the amounts deducted as tax for the previous month. He shall also submit a list in accordance with the officially approved form (A. R./2) showing the salaries and wages whihe had paid and the amounts which he deducted. He is to keep a copy of this for himself.

Article (6)

a-       The employer, other thathe ministries and government departments, shall ptTax Department at the end of each year with a list of his employees as well as the salary, wage, raises and allowances of each as well as the amounts deducted during the year for taxes on income and services.

b-       The employer shall provide the employee, upon his request, at the end of each year or upon the termination of his services, with a certificate in accordance with the officially approved (A.R./3), listing therein the total amounts of salaries and wages paid to him as well as the tax amount deducted from them for any of the years.

Article (7)

The assessing officer may request the employer to reduce or increase the tax due on the salaries and wages with a view to rectifying any deduction that might be made inadequately. The employer shall execute same under the penal penalty.

Article (8)

The employer, upon the termination of the services of any of his employees, shall ascertain that the taxes due on salaries and wages paid to him during his services were deducted and paid to the Tax Department in accordance with the regulations and procedures incorporated in the Income Tax Law in force and this Regulation as well as the instructions and decisions issued pursuant thereto. He shall supply the Department with a certificate containing all this information according to the form determined by the Director.

Article (9)

If an employer fail to deduct or pay taxes due to be deducted and paid in accordance with this Regulation, the amounts shall be collected from him as if they were taxes due on him.

Article (10)

It is not permitted to reduce salaries and wages for the purposes or reaching the taxable income for any employer unless the tax was deducted therefrom and paid to the Department in accordance with the provisions of this Regulation.

Article (11)

a-       Every employer shall keep a special register listing in it the names of all his employees as well as their salaries, wages, marital status, the exemptions they are entitled to, existing tax deductions and the changes which occur in respect of this information. He shall also include in it the necessary remarks which would facilitate the task of the assessing officer, which is stipulated in provision (b) of this article. The remarks should include the causes which make it necessary to stop the tax deduction pertaining to any of his employees.

b-       The assessing officer shall, with authorization from the Director, have the right to check the register mentioned under provision (a) of this article and any other register related to the employees with a view of ensuring the employer’s compliance with the Regulations and legal procedures relating to the deduction of the tax and of paying same.

Article (12)

The Regulation of Income Tax deduction from salaries and wages No. (46) for the year 1982 is hereby repealed.

Instructions No. (1) for the Year 1985⁽¹⁾

Instructions of Calculating the Allowances

Resulting from Employment

“Issued Pursuant to the provisions of clause (2), paragraph (a) of article (3) of the Income Tax Law No. (57) for the Year 1985”

Article (1)

The term “Living and Travel Allowance” shall mean: any sums paid to the employee or worker to cover the travel expenses related to work. The term “Representation Allowance” shall mean: allocated sums paid to officials and government, public institutions and local authorities employees for expending on the requirements of the job or position.

The term “Entertainment Allowance” shall mean: the sum paid to the employee for expending in the course of the job or work for entertaining the clients of the employer.

Article (2)

a-       No income tax shall be charged on the living and travel allowance paid to the employee.

b-       No income tax shall be charged on the living allowance paid to the private sector employee, provided this allowance is paid for work purposes and to the extent paid in this manner.

c-       No income tax shall be charged on the travel allowance or transport fares paid to the private sector employees not exceeding (10%) of the employee’s basic salary to a maximum of JD (600) per annum if expended at the work center and not exceeding (20%) of the employee’s basic salary to a maximum of JD. (1200) per annum if expended outside the aforesaid work center⁽¹⁾.

d-       No income tax shall be charged on the travel allowance or transport fares paid to the members of the boards of directors for each membership to a maximum of JD (600) per annum for the resident member and JD (1200) per annum for the non-resident, and provided that the total of such exempted sums shall not exceed JD (1500) per annum for the resident and JD (2500) per annum for the non-resident, irrespective of the number of memberships.

Article (3)

No income tax shall be charged on the representation allowance.

Article (4)

No income tax shall be charged on the entertainment allowance to the equivalent to 10% of the annual basic salary or two hundred forty Dinars per annum, whichever the less.

Article (5)

Upon assessment of the annual value of the housing provided to the employee or worker, the following shall be taken into consideration:

a-       If the employer has hired this housing, the paid rent shall be regarded as part of the income of the job or employment with regard to the beneficiary employee or worker.

b-       If the employer is the owner of such a housing, the annual amount of housing shall be calculated as the equivalent to the assessed net rental value for the purposes of the Buildings and Land Tax Law within the Municipal Areas. If, for any reason whatever, the net rental value has not been assessed, it shall be assessed by the tax assessor in accordance with the effective procedures and regulations of buildings and lands within the municipal areas in a manner similar to the nearest municipality to the building being assessed⁽¹⁾.

c-       If the housing provided to the employee or worker is not completely free of charge, this employee or worker shall be made to account for the difference between the value provided for in one of the paragraphs (a), (b) of this article on one hand and the contribution he pays on the other.

Article (6)

Upon assessment of the cost of boarding or lodging or residence provided to the employee, the following shall be taken into consideration:

a-       No income tax shall be charged on temporary boarding, lodging or residence.

b-       The value of boarding, lodging or residence shall be estimated by the sum entered by the employer in the monthly pay sheets he submits to the Income Tax Department.

c-       These sums shall not be deducted from the employer’s income unless he has deducted the tax therefrom and paid it.

Article (7)

These Instructions shall be applied to the year 1985 and the years that follow and Instruction No. (1) for the year 1982 shall be repealed.

Basis and Instructions

Assessment of Buildings and Lands within the Municipalities Areas

In view of the provisions of article (2) of the provisional Law No. (2) for 1984, the amending law of Buildings and Lands Tax Law within the areas of Municipalities No. (11) for the year 1954, having reviewed the subject by specialized committees, after hearing the opinion of the Ministry of Rural & Municipal Affairs and Environment and for the object of realizing the highest extent of equality in assessment, the Ministry of Finance refers these Basis and Instructions to the esteemed Council of Ministers for passing same as shown below :

First   : These instructions and basis apply on all the Municipalities

in the Hashemite Kingdom of Jordan.

Second        : The Municipalities in the Kingdom shall be classified,

depending on its building, commercial and industrial

condition, as follows :

1-       First Class Municipalities which include the following Municipalities ;

Capital’s Municipality, Jubaiha, Tla’Al-Ali, Umm Al-Summaq and the following basins Nos. 15, 11, 9, 3, 7, 16 of Wadi Essair Municipality.

2-       SeClass Municipalities which include the following Municipalities :

Irbid, Abu Alanda, Marj Al-Hamam, Quwaismeh, Juwaideh, Suwaileh, Tareq Municipality, Zarqa and Aqaba.

3-       Third Class Municipalities which include the following Municipalities :

Salt, Ma’an, K, Jarash, Mafraq, Um Qaseer & Muqablain and the WadiEssair bwhich were not mentioned under item (1), Fuhais and Rusaifa.

4-       Fourth Class Municipalities which include the following Municipalities :

Ramtha, Tafeela, Ajloun, Anjara, Dair Abi Said, Al-Shouneh Al-Shamaliya, Idon, Bait Ras, Khalidiya, Kraymeh, Mashari’, Sahab, Khraibit Al-Souq, Mahis, Ain Al-Basha, Dair Alla, Al-Shouneh Al-Janoubiyeh, Hashimiya (Zarqa), Al-Hisn, Huwara, Bushra, Kafr Youba, Hakama.

5-       Fifth Class Municipalities :

Any municipality which was not mentioned in the foregoing items.

Third :

a-       The buildings of every Municipality shall be divided as follows :

1-       Residential buildings

2-       Commercial buildings

3-       Industrial buildings

b-       The residential areas in every municipality shall be divided into grades according to the level of building therein by a resolution of a committee headed by the Assessment Inspector of the Governorate and four of the heads and members of the Assessment Committees in the Governorate to be appointed by the Minister, provided that the level of the location and street leading to the building, upon division is observed.

c-       The concerned Assessment Committee shall be entitled to increase or reduce a building from grade to another if there are justifying reasons thereto, provided that the approval of the Assessment Inspector in the Governorate is obtained.

d-       The building shall be deemed residential if used for residential purposes, irrespective of its location in an industrial, commercial or residential area and irrespective of the license issued for its construction.

e-       The building shall be deemed commercial or industrial if it is used for commercial or industrial purposes irrespective of its location in an industrial, commercial or residential area and irrespective of the license issued for its construction.

Fourth         :         The residential buildings shall be classified, in so far as its

level, according to the closest specifications applicable

thereon of the following grades :

a-       Super Class :

It should be observed that the building shall be of a distinguished excellent level and made of stone or marble and provided that the materials used in its various parts are of a superior type and provided with central heating or central air conditioning.

b-       First Class :

The building should be made of stone or marble, and provided that the materials used in its various parts are of good quality and provided with central heating.

c-       Second Class :

The building should be of concrete and the materials used in its various parts of medium quality and provided with central heating.

d-       Third Class :

The building should be of concrete or blocks and the materials used in its various parts are of ordinary quality.

 Fifth           :

a-       The residential building occupied by its owner or any of his descendants shall be assessed on the basis of square meter and according to the attached to Table No. (1). The area shall be taken from the building licenses, or works permit or measurement as the committee may deem proper.

b-       The leased commercial, industrial and residential buildings shall be assessed on the basis of lease contracts satisfactory to the Assessment Committee and if the committee discovers that the designated amount of lease does not equal the actual annual rent, the committee will assess the amount of rent taking due observance to the size of the building, materials used in its construction and location of the site on which the building is built, method of use of the building, rental or revenue of neighboring or similar property.

c-       The commercial or industrial building occupied by its owner shall be assessed on the basis of the prevailing rent in his area.

d-       The residential buildings where the buildings age therein vary shall be assessed on the basis of its age. A 10% of the rental assessed for buildings which were built up to 31^st December 1974. The date of obtaining the building license shall be considered for the purpose of application of this article, as the date of construction.

e-       Hotels, Pensions and hostel buildings shall be assessed after acquainting oneself with the classification established by the Ministry of Industry and Tourism on the basis of the square mater as shown in Table No. (2).

Table No. (1)

For Residential Buildings in First Class Municipalities

a-       Capital’s Municipality

b-       Jubaiha

c-       Tla’ Al-Ali

d-       Um Al-Summaq and the following basins Nos. 15, 11, 9, 3, 7, 16, of Wadi Essair Municipality.

1-       The areas of these Municipalities shall be divided into four areas namely : a, b, c, and d.

2-       The buildings shall be divided according to its level into two types :

a- Villa                   b- Apartments

The assessment of these buildings shall be as follows, irrespective of the area thereof :

           Dinar Per Square Meter

a-       (a) Areas

1-       Villa :

Deluxe buildings                8

First class buildings            7

Second class buildings        6

2-       Apartments :

Deluxe buildings                7

First class buildings            6

Second class buildings        5

Third class buildings           4

b-      (b) Areas

1-       Villa : This assessment applies on the villa assessed in “c” and        “d” areas.

Dinar Per Square Meter

Deluxe buildings                                        7

First class buildings                                    6

Second class buildings                                5

2-       Apartments :

Deluxe buildings                                        6

First class buildings                                    5

Second class buildings                                4

Third class buildings                                   3

c-       (c) Areas

1-       Apartments : This assessment applies on a section of (d) areas

Deluxe buildings                                        5

First class buildings                                    4

Second class buildings                                3

Third class buildings                                   2

d-      Public Areas

First class buildings                                            3

Second class buildings                                        2

Third class buildings                                           1

Residential Areas in Second Class Municipalities

Namely :      Irbid, Abu Alanda, Marj Al-Hamam, Quwaismeh & Juwaydeh, Suwaileh, Tareq Municipality, Zarqa and Aqaba.

1-       The areas of these Municipalities shall be divided into four areas namely : a, b, c, and d.         

2-       The buildings shall be divided, according to the standard thereof into two types :

a)       Villa                      b) Apartments

The assessment of these buildings will be as follows, irrespective of the area thereof :

a-       (a) Areas

1-       Villa :

Dinar Per Square Meter

Deluxe buildings                                            6

First class buildings                                        5

Second class buildings                                    4

Third class buildings                                       3

2-       Apartments :

Deluxe buildings                                            5

First class buildings                                        4

Second class buildings                                            3

Third class buildings                                               2

b-      (b) Areas

1-       Villa : This assessment applies on the villa assessed in (c) area.

Deluxe buildings                                            5

First class buildings                                       4

Second class buildings                                   3

Third class buildings                                               2

2-       Apartments : This assessment applies on a part of (c) areas.

Deluxe buildings                                            4

First class buildings                                       3

Second class buildings                                   2

Third class buildings                                               1

c-       (c) Areas

Apartments :

First class buildings                                                 2

Second class buildings                                   1.5

Third class buildings                                               0.750

Dinar Per Square Meter

d-      (d) Areas

First class buildings                                       1.5

Second class buildings                                   1

Third class buildings                                               0.50

Residential Areas in Third Class Municipalities

Namely :      Salt, Jarash, Mafraq, Um Qaseer & Muqablain, Madaba, Down Twon Wadi Essair, Fuhais, Rusaifa, Karak and Maan.

1-       The areas of these Municipalities shall be divided into four areas namely : a , b, c and d

2-       The residential buildings shall be divided, according to its standard, into two types :

a- Villa b-     Apartment

Dinar Per Square Meter

a-       (a) Areas

1-       Villa :

First class buildings                              5

          Second class buildings                          4

          Third class buildings                            3

2-       Apartments :

Delux buildings                                             4

          First class buildings                    3.5

          Second class buildings                          3

          Third class buildings                            2

b-      (b) Areas

1-       Villa :

First class buildings                              4

Second class buildings                          3.5

Third class buildings                                      2.5

Dinar Per Square Meter

2-       Apartments :

Deluxe buildings                                  3.5

First class buildings                              3

Second class buildings                          2

Third class buildings                            1

c-       (c) Areas

Apartments :

Second class buildings                                   1.5

Third class buildings                                      1

d-      (d) Areas                                           0.750

Residential Areas in Fourth Class Municipalities

Namely :      Ramtha, Tafeela, Khaldiya, Ajloun, Anjara, Dair Abi Sa’id, Al-Shouna Al-Shamaliya, Kraymeh, Mashari’, Sahab, Khuraibet Al-Souq, Mahis, Ain Al-Basha, Alla, Al-Shouna Al-Janoubiya, Hashmiya (Zarka), Al-Hosn, Huwara, Bushra,Kafr Yuba, Hakama, Idon, Bait Ras.

Residential building are assessed on the basis of square meter in the building area as follows :

a-       1- First class buildings                          2 Dinars per square meter

2- Second class Buildings           1 Dinars per square meter

3- Third class Buildings                        750 Fils per square meter

b-       1- First class buildings                          750 Fils per square meter

2- Second class buildings            600 Fils per square meter

3- Third class buildings                        500 Fils per square meter

Residential Areas in Fifth Class Municipalities

The rest of Municipalities which were not mentioned within the first class up to fourth class municipalities, the residential buildings shall be assessed on the basis of the square meter of the building area as follows :

1.     First class buildings (700) Fils/ per square meter

2.     Second class buildings (500) Fils/ per square meter

3.     Third class buildings (400) Fils/ per square meter

Instructions No. (3) for the Year (1985)⁽¹⁾

Entertainment Expenses’ Instructions Incurred by Taxpayers

“Issued Pursuant to the Provisions of Paragraph (m) of Article (9) of the Income Tax Law No. (57) for the year 1985”

Article (1)

The actual entertainment expenses incurred by the taxpayer in the Kingdom towards the production of the taxable income during the year shall be deducted within the extent and amounts provided for under article (2) of these Instructions.

Article (2)

It shall be permissible to deduct the entertainment expenses to a maximum of one half percent of the taxpayer’s annual gross income out of the taxable income resources relating to such expenses under the Income Tax Law No. (57) for the year 1985 or ten thousand Dinars per annum whichever is less irrespective of the number of income resources.

Article (3)

The amounts permitted to be deducted according to the provisions of the foregoing article shall include any amount paid to the employee as an entertainment allowance.

Article (4)

These Instructions shall apply to the year 1985 and the subsequent years and Instructions No. (4) for the year 1982 shall be repealed.

Instructions No. (5) for the Year 1985⁽¹⁾

Instructions for Calculating the Insurance Reserves

“Issued Pursuant to the Provisions of Paragraph (f) of Article (11) of the Income Tax Law No. (57) for the Year 1985”

Article (1)

These instructions shall be applied towards the income of the insurance companies generated from carrying on the various insurance activities except the life insurance activities.

Article (2)

The term “Effective Risk Reserves” shall mean the amount which the Insurer appropriates at the end of the fiscal year to meet the obligations which may arise, after the expiry of such year, from the insurance policies which were issued up to that date and still in effect except the life insurance policies.

The word “Reserve” claims under settlement means (the amount which is appropriated at the end of the fiscal year against accidents which have taken place and declared prior to the end of the year and are still under settlement or have not yet been settled.

Article (3)

Upon estimating the income of companies provided for under article (1) of these Instructions, the effective risk reserve and the claims under settlement reserves shall be deducted.

Article (4)

The effective risk reserve shall be calculated at the rate of (30%) for the insurance activities against the transportation risk and (40%) for the other insurance activities except the life insurance activities.

The two mentioned rates shall be calculated from the total instalments minus the instalments refunded to the Insurers and the instalments paid to the agreed upon re-insurers pursuant to the concluded annual agreements. The reserve for the claims under settlement shall be estimated by the total claims submitted by the Insured after deducting the doubtful claims and what the re-insurer companies may absorb of such claims.

Article (5)

The two reserves provided for under article (3) of these Instructions which were deducted from the income in the immediately preceding year shall be added to the income.

Article (6)

These Instructions shall be applied against the year 1985 and subsequent years.

Instructions No. (11) for the Year 1985⁽¹⁾

Instructions for Auditing the Annual Income Statements

and Assessment Decisions

“Issued Pursuant to the Provisions of Clause (3) of Paragraph (b) of Article (48) of the Income Tax Law No. (57) for the Year 1988”

Article (1)

The decisions of Assessors which are issued pursuant to the provisions of article (29) of the Income Tax Law No. (57) for the year 1985 shall be subject to the direct verification by the Director General of the Income Tax or by his appointee for this purpose.

Article (2)

a-       The following decisions of assessors which are issued pursuant to the provisions of article (30) of the Income Tax Law No. (57) for the year 1985 shall be subject the direct verification by the Director General of the Income Tax or by his appointee for this purpose:

1-       The decisions relating to the shareholding company.

2-       The assessment decisions comprising the acceptance of a loss.

3-       The assessment decisions comprising the levying of an income tax in excess of one hundred Dinars.

4-       Assessment decisions in the cases where the taxpayers keep accounts.

b-       The Head of the Assessment Office or one of his Assistants shall undertake to verify the decisions mentioned herein which comprise the levying of an income tax of one hundred Dinars and below except those relating to the shareholding companies or those based on accounts.

Article (3)

All the decisions for the finalization of the objection issued by the Assessors shall be subject to verification.

Article (4)

The Director General of Income Tax shall finalize any issue or controversy that arise out of the verification proceedings.

Article (5)

These Instructions shall be applied as of the date of publication thereof in the official gazette and Instructions No. (10) for the year 1982 shall be repeated.

Instructions No. (1) for the Year 1989⁽¹⁾

Instructions For Obligating Certain Categories of Taxpayers to Submit the Annual Income Statements Under the Penalty Fine

“Issued Pursuant to the Provisions of Article (27) of the

Income Tax Law No. (57) for the Year 1985”

Article (1)

With Due subservience to Instructions No. (2) for the year 1987, persons belonging to the following categories shall be obligated to submit the income statement provided for in Article (26) of the Income Tax Law No. (57) for the year 1985, in accordance with the prescribed form on a date not later 30^th April of every year for the previous year:

a-       Public and private joint stock companies.

b-       Partners in an ordinary company whose capital is not less than ten thousand Dinars or if the number of its employees is not below ten or if its annual purchases or annual sales are not less than fifty thousand Dinars. These partners shall also be made to submit the income statement of their company for the purposes of knowing the share of each partner in profits or losses.

c-       Individual merchants with individual capital of not less than five thousand Dinars or if the employees of each are not less than five or if the annual purchaser sales of each are not less than (25,000) Dinars.

d-       The following categories:

1-       Hospitals.

2-       Drugstores, pharmacies and laboratories.

3-       Classified and non-classified contractors.

4-       Cleaning, maintenance and procurement and other services, contractors.

5-       Investment offices.

6-       Airways, navigation, land transport, tourism and travel corporation offices.

7-       Employment offices and institutions.

8-       Real estate offices.

9-       Clearance establishments and companies.

10-     Advertisement and promotion offices.

11-     Commercial agents and brokers.

12-     Printing and publishing houses.

13-     Hotels, restaurants, cinema houses, theatres, casinos and amusement cities.

14-     Moneychangers and gold and silversmiths.

15-     Physicians.

16-     Engineers.

17-     Lawyers.

18-     Auditors.

19-     Real estate owners whose total annual per capita income accruing from his real estate is five thousand Dinars and more per annum.

20-     Private nurseries, ki, schools, community colleges and cultural centers.

e-       Anyone whose total anincome excfive thousand Dinars and is not covered by any of paragraphs (a), (b), (c), and (d) of this article.

Article (2)

The persons from the categories mentioned in the foregoing article who close their accounts at a date other than the end of the fiscal year must present the statement provided for in these Instructions within four months from the end of their fiscal year.

Article (3)

2% of the tax falling due shall be added thereto for every month in which the taxpayer included in the provisions of these Instructions defaults from presenting the statement provided for therein, on condition that the total tax added shall not exceed 24% of the tax due.

Article (4)

These Instructions shall apply to the private income statements for the year 1988 and subsequent years. Instructions No. (9) for the year 1985 shall be repealed.

Instructions No. (3) for the year 1989⁽¹⁾

Instructions of Outstanding Interests and Commissions

“Issued Pursuant to clause (3), paragraph (A) of article (3) of the Income Tax Law No. (57) for the year 1985 as Amended”

Article (1)

These Instructions shall be cited as “Instructions of Outstanding Interests and Commissions No. (3) for the year 1989” and their provisions shall apply towords banks, financial companies, investment banks, saving companies, contractual lending and specialized lending companies.

Article (2)

Interests and commissions shall be regarded as outstanding after the lapse of at least six months since the client has stopped payment. It is stipulated here that if the client is given new facilities, the outstanding shall be considered to be cancelled and the six-month period shall start from anew.

Article (3)

The outstanding of interests and commissions means a transformation of imposition of taxes on them from the principle of maturity to the principle of collection so that the tax on such outstanding interests and commissions be charged in the year of collection thereof.

Article (4)

For the purposes of applying these Instructions, the taxpayer to whom their provisions apply must:

a-       Attach to his annual statement another statement that includes the debtor’s name, the amount of principal debt, type of this debt, date of its granting thereof, guarantees, date of stopping payment, measures he has taken for the collection of the debt and the amount of the outstanding interests and commissions for the year concerned.

b-       Produce a certificate from the Central Bank comprising the amount of the outstanding and commissions for the concerned year too.

Article (5)

The certificates issued by banks, financial companies, investment banks, saving companies, contractual lending and specialized lending companies for their clients for the purposes of presenting them to the Income Tax Department for getting legal reductions or exemptions shall not include any outstanding interests, commissions or sums whether such a certificate pertains to the year 1989 or any previous or following year.

Article (6)

These Instructions shall apply to the year 1989 and the years following it.

Instructions No. (1) for the Year 1996⁽¹⁾

Instructions of Tax-Exempt Incomes Expenses

“Issued Pursuant to the Provisions of paragraph (c) of article (7) of the Income Tax Law No (57) for the Year 1985 as Amended”

Article (1)

Tax-exempt incomes shall bear the expenses related to them.

Article (2)

a-       Expenses and expenditures of tax-exempt investments at banks, financial companies, deposit companies, investment bank, savings and contractual loan companies, and specialized loan companies shall be determined by the ratio of the exempted income accruing from those investments to the total revenues and multiplying the outcome by the total expenses accepted in accordance with the provisions of the law, including the profits resulting from the purchase and sale of the stocks, shares and other financial investments not included in paragraph (b) and the profits of purchase and sale of loan debentures in and off the Amman Financial Market.

b-       The expenses and expenditures of profits accruing from purchase and sale of stocks, shares and other financial investments in and off the Amman Financial Market, resulting from the investment of the funds accumulated from the shareholders equity minus the net fixed assets as shown in the balance sheet of those parties shall be fixed by (25%) of these profits.

          The term “total revenues” means creditor interest and commissions, interests and profits of the securities portfolio and any other revenues whether taxable or tax-exempt.

          The term “total accepted expenses” means the legally accepted administrative and general expenses including debtor interest and commissions, deprecations and any other expenditures accepted under the provisions of the law.

Article (3)

Expenses and expenditures of tax-exempt incomes of public joint stock brokerage companies, companies with limited liability and foreign companies in Amman Financial Market shall be determined as follows:

a-       Through a setting-off between the collected investment deposits profits and collected interests on one hand and the paid profits of Murabaha (resale with specified profit) and paid interests on the other hand. The credit balance, if any, subsequent to setting-off shall bear (10%) thereof in return for its administrative expenses.

b-       The expenses and expenditures of tax-exempt investments, except the profits and interests stated in paragraph (a) of this article shall be determined by ratio of the exempted income accruing from those investments to the total revenues, and multiplying the outcome by the total expenses accepted in accordance with the provisions of the law including the profits accruing from the purchase and sale of the stocks, shares and other financial investments not included in paragraph (c) and including the profits accruing from the purchase and sale of the loan debentures in and off the Amman Financial Market.

c-       The expenses and expenditures of the profits accruing from the purchase and sale of stocks and shares and other financial investments in and off the Amman Financial Market resulting from the investment of funds accumulated from the shareholder or partner’s equity minus the net fixed assets as shown in the balance sheet of those parties at the rate of (25%) of these profits.

          The term “total revenues” means the net credit brokerage commissions and the interest and profits of the securities portfolio and any other taxable or tax exempt revenues except the profits and interests dealt with under paragraph (a).

          The term “total accepted expenses” means the legally accepted administrative and general expenses including the debtor interests and commissions, deprecations and any other expenditures acceptable under the provisions of the law.

Article (4)

The expenses and expenditures of the tax-exempt incomes of insurance companies shall be determined as follows:

a-       Through a set-off between the collected investments deposit profits and cinterest on one hand, and the paid profits of Murabaha (resale with specified profit) and paid interests on the other hand. The credit balance, if any, subsequent to a set-off, shall bear (10%) thereof in return for administrative expenses.

b-       The expenses and expenditures of tax-exempt investments, except the profits and interests stated in paragraph (a) of this article shall be determined by the ratio of the exempted income accruing from those investments to the total revenues, and multiplying the outcome by the total of the expenses accepted in accordance with the provisions of the law including the profits accruing from the purchase and sale of the stocks, shares and other financial investments not included in paragraph (c) and including the profits accruing from the purchase and sale of the loan debentures in and off the Amman Financial Market.

c-       The expenses and expenditures of the profits accruing from the purchase and sale of stocks and shares as well as other financial investments in and off the Amman Financial Market resulting from the investments of funds accumulated from the sh’ equity minus the net fixed assets as shown in the balance sheet of those parties at thrate of (25%) othese profits.

          The term “total revenues” means the total profits of insurance branches except for life insurance and other external branches before deducting the administrative and general expenses plus the securities portfolio interests and profits as well as and any other taxable or tax-exempt revenues save the profits and interests dealt with under paragraph (a) of this article.

          The term “total accepted expenditures” means the administrative and general expenses distributed to the insurance branches and non-distributed including the debtor interests, commissions, deprecations and any other expenditures acceptable under the provisions of the law.

Article (5)

Expenses and expenditures of tax-exempt incomes of industrial, trading and other companies including public joint-stock companies, limited liability companies or foreign companies shall be determined as follows:

a-       Through a set-off between the collected investment deposit profits and cashed interests on one hand, and the paid profits of Murabaha (resale with specified profit) and paid interests on the other hand. The credit balance, if any, subsequent to set-off, shall bear (10%) thereof in return for administrative expenses.

b-       The expenses and expenditures of tax-exempt investments, except for profits and interests stated in paragraph (a) of this article shall be determined by the ratio of the exempted income accruing from those investments to the total revenues and multiplying the outcome by the total expenses accepted in accordance with the provisions of the law including the profits accruing from the purchase and sale of stocks, shares and other financial investments not included in paragraph (c) and including the profits accruing from the purchase and sale of loan debentures in and off the Amman Financial Market.

c-       Expenses and expenditures of the profits accruing from the purchase and sale of stocks, shares and other financial investments in and off the Amman Financial Market resulting from the investment of funds accumulated from the shareholders on partners’ equity minus the net fixed assets as shown in the balance sheet of those parties at the rate of (25%) of these profits.

          The term “total revenues” means the total profits of the activity plus the interests and profits of the financial securities portfolio and other taxable or tax-exempt revenues except the profits and interests dealt with in paragraph (a) of this article.

          The term “total accepted expenditures” means the administrative, general, marketing and transformation expenditures, sale, distribution, research, training, depreciation and any other expenditures accepted in accordance with the provisions of the law but not included in the direct cost of the activity.

Article (6)

Any sums drawn from the company shareholders or partners’ equity (according to the specific definition of this word in the law) and directed to another project owned by that company, but the project was not taxable or exempted from the tax, shall be excluded from the company shareholders or partners’ equity for the purposes of calculating the balance left over from that equity after subtracting the net fixed assets upon application of these Instructions.

Article (7)

The expenses and expenditures of tax-exempt investments for taxpayers other than public joint stock companies, limited liability companies or foreign companies shall be determined in accordance with the interest rate at which that taxpayer borrowed and multiplied by the average size of tax-exempt investments, provided that these expenses and expenditures shall not exceed the paid interest and the paid profits of Murabaha or 60% of the exempt income, whichever is less, and that they shall not be less than (25%) of the exempt income under any circumstances.

Article (8)

Owners of projects that enjoy a tax exemption under the Investment Promotion Law, Free Zones Law, Industrial Estates Law or any other law or decision must keep independent accounts for these projects throughout the period of exemption.

Article (9)

A taxpayer who derives an income from the land invested in agriculture, horticulture, forestation, zootechnics live piscicuture or apiculture including the income accruing from the transformation of their products into other commodities through simple manual work must keep independent accounts for these incomes and he is not allowed under any circumstances to mix these incomes and their expenses on one hand and his other expenses and their incomes on the other hand.

Article (10)

If the taxpayer keeps independent accounts for his taxable and tax-exempt activities and if there were any common and inseparable expenses and expenditures that serve both types of activities such as salaries, wages and allowances of the Director General, these expenses and expenditures shall be distributed between the taxable and tax-exempt activities according to the mean of the following formula:

Article (11)

These Instructions shall be applied on the year 1996 and the subsequent years.

Instructions No. (2) for the Year 1996⁽¹⁾

Bad Debts Instructions

“Issued Pursuant to the Provisions of paragraph (g) of article (9) of the Income Tax Law No. (57) as Amended”

Article (1)

Bad debts resulting from any work, trade, craft, or profession shall be deducted as part of the expenditures and expenses spent or totally and exclusively fell due for production of total income during the year even if those debts have become due before the beginning of the year.

Article (2)

Any amount recovered in any year of the amounts that were allowed to be deducted as bad debts shall be considered as an income during that year.

Article (3)

Any debt or part thereof shall be considered as a bad debt if could not be collected owing to any of the following cases:

a-       Bankruptcy or insolvency of the debtors.

b-       Making a compromise with his creditors.

c-       Debtor’s death without leaving an inheritance that is sufficient for totally or partially paying back his debts.

d-       Debtor’s disappearance, departure without any news or information heard about him and without leaving a property or funds sufficient to totally or partially pay back his debts.

e-       Inability of the debtor to pay back his debts despite requesting him through available means to do that, and the debt or any part thereof was not covered by adequate guarantees and the debtor did not have sufficient movable or immovable property for execution through a written declaration by the debtor as follows:

1-       After the laps of (12) months as of date of notifying him in writing that he had defaulted to pay the sums from JD 1 to JD 100,000.

2-       After the lapse of (24) months as of the date of notifying him in writing that he had defaulted to pay the sums from JD 100,001 to JD 500,000.

3-       After the lapse of (36) months as of the date of notifying him in writing that he had defaulted to pay the sums above JD 500,000.

Article (4)

Bad debts in respect of which court judgements have been made, but were not carried out through the Execution Department, shall be completely and fully deducted at once in accordance with the provisions of these Instructions.

Article (5)

With due observance to the provisions of article (4) of these Instructions, bad debts shall be amortized in annual instalments not exceeding JD 100,000 or (25%) of the net income, whichever is greater, before deducting this expense. For the purposes of this article the term “net income” means what is left of the total income after deducting the legally acceptable expenses and amortization before completing the deduction of these bad debts.

Article (6)

For the bad debts governed by the provisions of these instructions to be deducted, the following conditions shall be observed:

 First: The taxpayer shall keep regular and correct accounts he belongs to one of the following categories:

a-       Public shareholding companies, companies of limiliability, partnein shares, ordinary partnerships and foreign companies irrespective of their type.

b-       Partners in Jordanian partnerships for their company if the capital thereof is not below ten thousand Dinars or the employees thereof are not less than ten in number or if the annual purchases or sales thereof are not less than one hundred thousand Dinars. This shall apply also to partners in joint ventures.

c-       Individual merchants the capital of each of whom is not below five thousand Dinars, or the employees of each of whom are not below five in number, or if his annual purchases or sales are not less than fifty thousand Dinars.

d-       The following categories whether they are included or not in paragraphs (a, b, c) of “First” of this article:

1-       Hospitals

2-       Drugstores, pharmacies and laboratories of all kinds.

3-       Classified contractors.

4-       Contractors of cleaning, maintenance and procurement and other services.

5-       Investment offices of all types.

6-       Offices of airlines, shipping, land transport and tourism and travel companies.

7-       Employment offices and institutions.

8-       Real estate offices.

9-       Clearance establishments and companies.

10-     Promotion and Advertising offices.

11-     Commercial agents and brokers.

 12-    Printing and publishing houses.

13-     Classified hotels, restaurants, cinemas, theatres, casinos and recreation cities.

14-     Moneychangers and jewelers.

15-     Private universities, private community colleges and schools and cultural centers.

Secondly:     He shall keep a daily journal a receivables book and present an account of annual revenues and expenditures if he belongs to the following categories:

1-       Physicians

2-       Engineers.

3-       Lawyers.

4-       Auditors.

5-       Kindergartens and nurseries if the number of children therein is thirty children.

6-       Real estate owners the total income of each of whom amounts to ten thousand Dinars or more per annum.

The categories included in this paragraph may suspend the non-cashed revenues appearing in the receivables book and present an account about them in the year they are collected. They shall forfeit their right to enjoy this ruling if they do not keep the journal or the receivables book.

Thirdly:        The taxpayer shall present the information related to bad debts in accordance with the prescribed form attached to these instructions which is called form (e).

Article (7)

These Instructions shall apply to the year 1996 and subsequent years.

INCOME TAX DEPARTMENT

FORM (E)

BAD DEBTS

Issued Pursuant to Article (6) of Instructions No. (2) for the Year 1996

Name of Taxpayer                                                  :        

Year                                                                     :

Net Profit Prior to the Deduction of Bad Debts         :

File No.                                                                 :

Date :

                                                          Taxpayer’s Signature

INCOME TAX DEPARTMENT

FORM (E)

BAD DEBTS

Issued Pursuant to Article (6) of Instructions No. (2) for the Year 1996

Name of Taxpayer                                                  :        

Year                                                                     :

Net Profit Prior to writing off the Bad Debts             :

File No.                                                                 :

Date :

                                                          Assessor’s Name:

                                                          Assessor’s Signature:

Instructions No. (3) for the Year 1996⁽¹⁾

Depreciation Instructions

“Issued Pursuant to the Provisions of paragraph (J) of article (9), Income Tax Law No. (57) for the Year 1985 as Amended”

Article (1)

A taxpayer who applies for a reduction under paragraph (j) of article (9) of the Income Tax Law No. (57) for the year 1985 owing to depreciation of any building and depreciation, wear and tear of machinery, engines, furniture owned by the taxpayer or those he possesses for the purpose of owning them now or eventually and which he uses for generating income, must present a list according to the form prescribed and attached to these Instructions under the designation Form (k).

Article (2)

Upon making the deduction prescribed in Article (1) of these Instructions, the following rules should be observed:

a-       The value of the land should not be depreciated.

b-       The total deduction on account of depreciation, wear and tear under the law referred to in Article (1) of these Instructions and previous laws, should not exceed the original cost.

c-       If the total income is less than the value of deprecations in any year, the balance thereof shall be carried forward to the next year or years that follow.

Article (3)

With due observance to the provisions of Article (4) of these instructions, the amounts deductible pursuant to paragraph (j) of Article (9) of the Income Tax Law No. (57) for the year 1985 shall be computed according to the percentages listed in the table annexed to these instructions.

Article (4)

The taxpayer has the right to:

a-       Raise the percentages shown in the table annexed to these Instructions to an amount not exceeding double the aforesaid percentages if he wishes, and buildings shall be excluded from the provisions of this paragraph.          

b-       Reduce the percentages shown in the table annexed to these instruction if he wishes. He is also entitled to decide not to deduct depreciation in any year without prejudicing his right to completely depreciate the original cost of any assets pursuant to the provisions of these Instructions.

c-       Provisions of paragraph (b) of this article shall not apply to any tax-exempt project during the period of total or partial exemption. The taxpayer who owns the project should, during that period, abide by the ratios prescribed in the table attached to the Instructions as a .

d-       The depreciation of the assets which was commissioned to the service of production in the first half of any year shall be for one complete year while the assets commissioned to the service of production in the second half of the year shall be for half a year, regardless of the number of days or months without any infringement upon the provisions of paragraphs (a, b, c) of this article.

Article (5)

a-       The cost of buildings in joint investment projects shall be depreciated equally over the years of contract and that value of depreciation for the investor shall be an income for the owner of the land accruing to him from that investment project in addition to what may be due to him in terms of key-money, goodwill money, rents or any other benefit in accordance with investment contract.

b-       Temporary service installations like dormitories, barracks, roads and courtyards of other contractual projects not governed by the provisions of paragraph (a) of this Article utilized in the production process shall be depreciated equally over the yof the contract.

Article (6)

The depreciation, wear and tear of the buildings used for income prodwhich were not alloweby the law to be depreciated shall be on the basis of the balance of their original cost as it is on 1^st January 1996. That balance shall be determined by the difference between the original cost of the building and its life time in the years starting from the date of its construction until 31^st December 1995 multiplied by the annual percentages of the building as based on the percentage tables that were approved under the previous tax laws of the buildings whose depreciation was permissible by the law according to the category of each building.

Article (7)

These instructions shall be applicable to the year 1996 and the years subsequent thereto and Instructions No. (2) for the year 1985 shall be repealed.

INCOME TAX DEPARTMENT

FORM (K) FOR DEPRECIATION

“Issued Pursuant to Article (1) of Instructions No. (3) for the Year 1996”

Taxpayer’s Name                                                   :        

Year                                                                     :

File No.                                                                 :

Date :

                                                          Taxpayer’s Signature

Table of Depreciation Percentages As Fixed

Under Article (3) of Depreciation Instructions

No. (3) for the year 1996

Chapter One

Buildings

                                                                                      Depreciation

                                                                                      Percentage

1-       Industrial buildings/containing working

machines, equipment and apparatuses                                4

2-       Ordinary or prefabricated buildings (non industrial)

3-       Temporary and non-durable buildings that can be

dismantled, removed, transported and reconstructed

such as hangars, prefabs, camps, reservoirs, tanks,

towers, basins and pavements                                           10

Chapter Two

Furniture and Upholstery

1-       Furniture and upholstery for dwelling, sleeping and

work purposes manufactured of iron, wood and fixed

plastics without electrical appliances or hydraulic

apparatuses.

a-       In general                                                               10

2-       Hospital, tourist services, hotels, hostels, café’s,

restaurants, showrooms, entertainment places,

rest houses, swimming pools and resorts.                           15

3-       Furniture prepared for keeping purposes and coffers

          made of metal such as safes and deposit lockers.                2.5

                                                 Depreciation

                                                                                      Percentage

4-       Furniture and upholstery manufactured of various

          materials for decoration, embroidery, adornment

and beauty purpose, both fixed and mobile                         15

Chapter Three

Means of Transport

1-       All the air transport equipment and apparatuses

that work on liquid or gaseous fuel, or wind   

energy like all types of aircraft                                           15

2-       All apparatuses and equipment of land transport

          vehicles that work on liquid, gaseous or solid fuel

          like motor cars, buses, locomotives, bicycles and

          other means of transport that rely on human or

animal effort.                                                                            15

3-       All apparatuses and equipment of sea transport that

          work on fuel, human effort or wind energy etc. like

          ships, boats and floating trailers.                                        5

4-       Others such as pipes, canals, water wheels, tunnels

          bridges and culverts.                                                         5

Chapter Four

Apparatuses, Machinery and Equipment

Not Mentioned in Chapter Three

1-       Apparatuses, machinery and equipment that work on

          solid, liquid or gaseous fuel, wind or waterfalls e.g.:

stoves, boilers, ovens and furnaces, power generators,

stone crushers, concrete pumps, steam rollers,

                                                 Depreciation

                                                                                      Percentage

mechanical pounders, spreaders, mixers of all types,

graders, bulldozers, tractors, scoops, fixed or mobile

lifts.                                                                                15

2-       Apparatuses and machinery of equipment that work by

          electric energy or by means of apparatus and equipment

          working on electric energy such as :                                   10

*        All types of mills apparatuses and equipment

*        Counting, calculating, control, operation, examination,

          testing, measurement, weighing machines clocks and

          timers.

*        All types of factory apparatuses and machinery such as:

          Ice factories, mineral waters, shoe, cases, belts , bags and

container factories, starch, canned food , juice, bricks, tiles,

floor tiles, ships, pipes , cement and derivatives thereof, glass,

iron and steel printing presses, and table salt factories; paper

and cardboard, aluminum, copper, minerals, calcium and

chemicals, razor blades, pottery and ceramics, medicines, tanks

and barges, basins, plastic, tannery, organic fertilizers,

refineries, all types of olives and cereals presses; manufacturing of machinery, equipment, parts, instruments, tools, motors,

pumps, lifts, boring, lifting , unloading and loading machinery; paint and metal coating by spraying or precipitation, factories; cooling, heating, plaiting, bending and rolling, cutting, twisting, pressing, squeezing, stripping apparatuses, and apparatuses of spinning, weaving, braiding, tailoring, darning, assembling, knitting, ironing, washing, drying, moistening , fumigating, air conditions, electric welding of all types; stamp and sealing tools, electric detectors, cinema and projector machines, high voltage; apparatuses and equipment; electric posts and insulators; gas pressing machines of all kinds, blowing

                                                                                      Depreciation

                                                                                      Percentage

instruments of different types, lab equipment and machinery of various kinds, voltage, amperage and vibration control machinery; transmitters.

3-       Apparatuses and equipment working by electronic circuits, electricity and radiation not mentioned in the previous item such as:

          Wire, wireless and cellular telephones; televisions, videos, recorders, photography equipment, magnifiers, sterilization, electronic clocks, watches and timers; dry or liquid or durable cells; overground or underground electric wires and cables; radar and satellite apparatuses, radiology and medical radiological and synthetic (industrial) treatment, wire and wireless telecommunication equipment, voltage, amperage and frequency level control machinery; ultrasound and television diagnosis in hospitals or laboratories, fax and modern equipment.

4-       Quickly modernized apparatuses and equipment such as:

          Computers, laser printers, surgery tools and equipment, operation theaters, computer operated apparatuses e.g. scanners (CNC) or computerized direction of machines, computerized planning machinery.                                                            20

5-       Other equipment like:

          Iron and wood scaffoldings of various kinds, molds of different types, returnable parcels and packages including containers and advertisement posters and signboards, escalators, capital equipment and conveyor belts                                                       20

N.B. The cast of depreciated instruments and materials used in

          production such as glassware, small machinery and equipment, white linen, parcels, computer programs, printing letters are regarded as annual expenses required for income generation.

Instructions No. (4) for the year 1996 ⁽¹⁾

Instructions of Training, Marketing , Research anDevelopment Expenses and Expenses of Employees’ Medical Treatment, Travel, Transport, Food and Medication Incurred by Taxpayers

Issued Pursuant to the Provisions of paragraphs (N)

and (O) of Article (9) of the Income Tax Law (57) for the

Year 1985 as Amended.

Article (1)

“Training expenses” means the expenses of training courses incurred by the taxpayer for training himself and his employees for the purposes of work. This shall not include the scholarships which aim at obtaining an academic degree and provided that the training course duration shall not exceed six months.

Article (2)

Deduction may be carried out for the entire training, marketing, research and development of the expenses that were expended and have become due in respect of the production of the entire income in the year concerned.

Article (3)

Expenses provided for in Article (2) of these instructions may be deducted if the expenditure thereof was the exclusive responsibility of the taxpayer, and they shall not be deducted if the responsibility lies with the head office if the taxpayer is a subsithereof in the Kingdom, or lies with the manufacturing company and other similar cases.

Article (4)

Actual expenses incurby the taxpayer in respect ohis employee’s travel and transport for the benefit of the work may be deducted and the same applies to the expenses of their meals at the work site.

Article (5)

Instalments and expenses incurred by the taxpayer for the medical treatment of his employees and their insurance against work injuries or death.

Article (6)

These Instructions shall be applied to the year 1996 and subsequent years and Instructions No. (1) for the year 1992 shall be repealed.

Instructions No. (5) for the year 1996⁽¹⁾

Instructions of Convalescencing from the Incurable Diseases and Surgery Expenses outside the Kingdom

“Issued Pursuant to the provisions of paragraphs (e) and (f) of article (14) of the Income Tax Law No. (57) for the year 1985 as Amended”

Article (1)

The amount paid by the natural person who is residing for treatment and Convalescencing from the incurable diseases shall himself and his legal dependents be exempted from the tax provided that the total exempted amount under this article does not exceed (5,000) Dinars per annum for treatment and Convalescencing from such diseases in the Kingdom and (10,000) Dinars abroad.

Article (2)

The amount paid by the natural person who is residing for a surgery operation carried out to him outside the Kingdom or to his legal dependents shall be exempted from tax provided it is an emergency operation or it is not possible to carry it out in the Kingdom provided that the total exempted amount under this article does not exceed (5,000) Dinars per annum.

Article (3)

The term “incurable diseases” means such diseases which are decided by the competent official medical authorities in the Kingdom to be so.

The term “emergency operation” means the surgical operation whose reasons and justifications of carrying it out are caused by the individual’s presence outside the Kingdom and cannot be postponed for carrying same in the Kingdom after his return thereto.

The term “A surgery which cannot be carried out in the Kingdom” means every surgical operation which the competent official medical authorities decides that it is not possible to carry it out in the Kingdom for any reason.

Article (4)

The resident individual who claims that he has paid an amount or amounts outside the Kingdom as a fee for a surgical operation carried out abroad to him or to his legal dependents as being an emergency operation or which cannot be carried out in the Kingdom or for Convalescencing from an incurable disease should attach to his statement or produce a substantiating certificate from the party provided for under article (3) of these Instructions and confirm his claim by receipts of the amounts paid which are legalized by the competent authorities.

Also, he should produce receipts of the amount paid for treatment and Convalescencing from the incurable diseases from the treating party in the Kingdom.

Article (5)

These Instructions shall be applied on the year 1996 and subsequent years and Instructions No. (6) for the year 1985 shall be repealed.

Instructions No. (6) for the year 1996 ⁽¹⁾

Instructions of Implementation of the

Provisions of Article (17)

“Issued Pursuant to Paragraph (D) of Article (17)

of the Income Tax Law No. (57) for the year 1985 as Amended

Article (1)

These Instructions shall be applied only and exclusively to the companies among taxpayers categories. The word “company” shall denote the meaning prescribed therefor in paragraph (E) of article (17) of the Law as follows:

1-       Public shareholding company. The cooperative society shall be considered, if profit oriented, a public shareholding company.

2-       Limited liability company.

3-       Jordanian partnership in shares, except for the shares of joint partners.

4-       Jordanian limited partnership except for the shares of the joint partners.

5-       The foreign company or its branch of any type whether it is resident or non- resident .

Article (2)

The tax shall be charged at the rate of (15%) of the taxable income of the companies derived from a project in one of the following sectors:

a-       Mining

b-       Industry

c-       Hotels

d-       Hospitals

e-       Transport provided that the paid up capital of the company is not less than one million Dinars.

 f-      Construction contracts provided that the paid up capital of the company is not less than one million Dinars

g-       Any other sector or activity decided by the Council of Ministers following a joint recommendation by the Minister of Finance and the Minister of Industry and Trade.

Article (3)

The term “project in the mining sector” means the project that extracts minerals found in a natural form i.e. solid materials like coal, liquid materials like crude oil, or gaseous materials like natural gas. This includes mining under the ground or on the surface of the ground , or seas, lakes and rivers; and the processes of preparing these materials and marketing. This term does not include projects of exploiting quarries for producing materials used in building or road pavements.

Article (4)

The term “project in the industry sector” means an industrial project in all the industry sectors and branches thereof including the execution of a partial or total change in this material in order to produce a different product in terms of description, form, properties and structure and in a manner whereby these processes are continuously carried out inside an establishment of their own.

Article (5)

The term “project in hotels sector” means hotel, tourist village and city as well as resort. The term does not include the hotel management companies licensed for this purpose.

Article (6)

The term “project in the hospital sector” means any hospital, convalescent home, nursing home, maternity, rehabilitation or old peoples infirmary or home for the aged, and any place used or prepared for receiving people

suffering from any illness or physical injury, or physical or mental disability or receiving women when giving birth to children, for the treatment or nursing of these people. The term does not include independent clinic for treatment, nursing, care and rehabilitation which do not constitute a facility (of the hospital).

Article (7)

The term “project in the transport sector” means the project which carries passengers, goods and any other materials and includes land transport, transport by pipelines , sea transport and air transport. It does not include supporting and supplementary activities such as travelling and tourism agencies, transport agencies and any activities independent of the project notwithstanding the fact that they are supporting or supplementing this sector and provided that the paid-up capital of the company is not less than one million Dinars.

Article (8)

The term “a project in the construction contracts sector” means any project in the fields of roads, buildings, electromechanics, water, sewage, and otheworks, provided that the paid –up capital of the company is not less than one million Dinars and in accordance with the following detail operative in Annex (1) of the Instructions of Contractors Classification:

a-       First Field (Roads)

Construction of roads of all types including opening . pavement and asphalting. Work shall include earthwork, base courses, bridges, culverts, mixes and complementary works including sidewalks, railings etc. and maintenance of those works.

1-       Specialization of (asphalt mixes)

Preparation and execution of hot and cold asphalt mixes of surface layers of the road including patching and preparation of such layers and maintenance of those works.

 2-      Specialization of (road concrete works):

Construction of bridges , junctions, culverts, retaining walls for road works, tunnels, drainage culverts, heavy and specialized concrete constructions and maintenance thereof.

3-       Specialization of (earth works : roads)

Carrying out excavation and compaction of road and earth

dams and execution of base courses and leveling….etc.

b-       Second Field (Buildings):

Construction of public buildings, housing complexes, schools, hospitals, hotels, housing projects, industrial and concbuildings including infrastructure, installations and finishing so that these buildings are ready for use and maintenance of theworks.

1-       Specialization of (prcast concrete buildings):

Construction of building out of pre cast concrete elements. Work includes manufacturing and installation and assembling these constituents; construction of foundations finishing and installations for ready-for-use building; and maintenance of those works.

2-       (Metal establishment buildings) specialization:

Construction of metal buildings such as factories, warehouse and hangars. The work includes complete integrated buildings including foundations, frameworks, and installations and finishing so that the buildings will be ready for use. The specialization covers the maintenance of the said constructions.

3-       (Pre cast ready buildings) specialization:

Construction of residential, industrial or public etc. buildings of mineral materials, asbestos or polymerized buildings. The work includes integrated buildings covering: foundations, frameworks, installations and finishing so that buildings will be ready for use. The specialization covers the maintenance of these works.

 4-      (Buildings maintenance) specialization:

This specialization covers maintenance of civil works such as frameworks, completion works such as restoration of concrete, stone, bricks, plastering, floors, wood work, metal work, painting, roof insulation…etc. and maintenance of all that which pertains to electric elements and sanitary installations.

c-       Third Field (Electromechanics):

Execution of all mechanical electrical and sanitary work like installation of water network, drainage, gas, heating, conditioning and cooling , electrical lighting of the streets, electric power works, installations, power and transformer stations, waste water (sewage) stations, industrial projects and operation and maintenance thereof.

1-       (Mechanic) Specialization : -

Making the mechanical and sanitary installations heating systems, conditioning, ventilation, cooling, laboratories, internal water and drainage network, installation of mechanical gear such as boilers, pumps, compressors, refrigerators ..etc. and operation and maintenance thereof.

2-       Electricity Specialization

Buildings and street lighting, electrical power stations and transformer stations for transport and distribution and operation and maintenance thereof; execution of high voltage and low voltage over and underground networks and operation and maintenance thereof.

3-       Low voltage (Electricity, electronics and telecommunications ) specialization :

Installation, operation and maintenance of apparatuses and systems related to wire and wireless telecommunications, computer, telephone exchanges, electronic systems, acoustics, video and protection systems.

 4-      (Electro mechanical maintenance) Specialization:

Maintenance and operation of electrical and mechanical equipment,water, drainage and lighting net works, electric power , lifts, air conditioning, cooling and others.

d-       Fourth Field (Water and Sewage)

It includes water, sewage, irrigation and drainage projects and water treatment plants.

1-       (Sewage water) specialization:

It includes water pipes, valves, pumping stations, reservoirs, fire fighting systems, sewage pipes, manholes, water collection, construction works of flood drainage canals etc, and operation and maintenance thereof.

2-       (Irrigation and drainage ) Specialization:         

It encompasses irrigation and drainage water which include irrigation systems, land reclamation and surplus water drainage.

3-       (Water and sewage treatment plants and pumping) specialization:

Establishment of water treatment plants including civil, mechanical and electrical works, operation and maintenance thereof.

e-       Fifth Field (Other works)

N.B. (Classification shall be made in specific specialization of this field and not in the field as a whole).

1-       (Excavations and mining ) specialization:

This specialization includes mines excavations and works related thereto.

2-       (Railways) specialization:

Construction of railway lines and the works they require in

 terms of ground works, base courses, cross beams, junction

installations, express transportation systems and trains.

3-       (Well drilling and injection) Specialization

This specialization includes drilling deep and superficial wells as well as foundations and wells injection and piles construction

4-       (Public works) specialization:

The specialization includes execution of works in the field of building, water, sewage, electricity and mechanics, construction of walls, fences, pavements and passageways.

Article (9)

In addition to what has been provided for in these instructions and upon definition and identification of the project (mining, industry, hotel, hospital…etc.) the company’s memordanum of association, articles of association and registration certificate in addition to physical viewing and receiving the assistance and opinion of the competent parties and other concerned parties whenever necessary.

Article (10)

For the purposes of clause (2) paragraph (B), Article (17) of the law, the term “brokerage companies” means any type of companies provided for in Article (1) of these Instructions and works as a (broker) as specifically defined in the Amman Financial Market Law.

Article (11)

These Instructions shall apply to the year 1996 and subsequent years.

Instructions No. (7) for the year 1996 ⁽¹⁾

Instructions of Keeping Accounts

Issued in Accordance with the provisions of Article (22),

Paragraph (A) of the Income Tax Law No. 57 for the year 1985

as Amended.

Article (1)

Persons of the following categories shall be bound to keep the books specified in Article (2) of these Instructions in accordance with effective laws and acceptable accounting principles approved by the competent parties in the Hashemite Kingdom of Jordan:

a-       Public shareholding companies, limited liability companies partnerships in shares, limited partnerships and foreign companies regardless of their type.

b-       Partners in Jordanian partnerships for their company if the capital thereof is not below ten thousand Dinars or the employees thereof are not less than ten in number or if the annual purchases and sales thereof are not less than one hundred thousand Dinars. This shall apply to partners in joint ventures.

c-       Individual merchants the capital of each of whom is not below five thousand Dinars, or the employees of each of whom are not below five in number, or if his annual purchases or sales are not less than fifty thousands Dinars.

d-       The following categories whether they are included or not in paragraphs (a,b,c) of this Article:

1-       Hospitals

2-       Drugstores, pharmacies and laboratories of all kinds

3-       Classified contractors

4-       Contractors of cleaning, maintenance, procurement and other services.

5-       Consultant offices of all types

6-       Offices of airlines, shipping, land transport and tourism and travel companies

7-       Employment offices and institutions

8-       Real Estate Offices

9-       Clearance establishments and offices

10-     Promotion and advertising

11-     Commercial agents and brokers.

12-     Printing and publishing houses.

13-     Classified hotels, restaurants, cinemas, theaters, casinos and recreation cities.

14-     Moneychangers and jewelers.

15-     Private universities and private community colleges and schools and cultural centers.

Article (2)

Books that must be kept shall be the following :

a-       Journal or daily book.

b-       Letter duplicates book.

c-       Inventory and budget book

d-       Any supplementary registers including the receivable book required by the nature of work and acceptable accounting principles approved by competent parties in the Kingdom.

Article (3)

a-       Self employed people of the following categories must at least keep a daily book or journal , a receivables book and present an account of annual revenues and expenditures provided that there books are supported with documentary evidence besides a statement of due receivables and another statement of the taxpayer’s depreciable assets in accordance with the prescribed form (k)

1-       Physicians

2-       Engineers

3-       Lawyers

4-       Auditors

5-       Kindergartens and nurseries provided tthe number of children in each exceeds thirty

6-       Real estate owners any of whom earns a total annual income of ten thousand Dinars omore from his real estate property .

b-       Categories included in paragraph (a) of this article may suspend unreceived revenues appearing in the receivables book and settle their accounts in the years of their respective collection. They shall forfeit their rights to enjoy the benefits of this provisions if they do not keep the journal daily book or the receivables book.

Article (4)

a-       Any one who has one or more taxable source of income not derived from a job or employment whether governed by the provisions of these Instructions or not, must keep bills or invoices of his sales whether they are goods or services and invoices of his purchases and expenses and present these bills or invoices upon request for the purposes of examination or checking with a view to realizing the aims of the Income Tax Law and the Regulations and Instructions issued in accordance therewith.

2.     Bills referred to in paragraph (a) of this article must contain the following basic items of information: serial number, name and address of the issuing party of the bill, name of the agency to which the bill has been issued ; place where the bill was done, type and quantity of commodity or service, until value, complete value of the bill, date and signature.

c-       With due observance to the laws in force, every person governed by the provisions of these Instructions must keep these books and documents for a period of ten years after their completion.

Article (5)

A copy of the final accounts and the balance sheet extracted from the books must be attached to the annual statement of self-assessment upon submission of same.

Article (6)

These Instructions shall go into operation as of January 1, 1997 and the Instructions of Keeping Accounts No. (4) for the year 1989 shall be repealed.

Instructions No. (8) for the Year 1996⁽¹⁾

Instructions for the Provisional Exemption

from the Submission of Annual Returns

“Issued Pursuant to the provisions of paragraph (c) of article (26) of the Income Tax Law No. (57) for the year 1985 as Amended”

Article (1)

The following categories shall be exempted from the submission of the personal assessment returns provided for under article (26) of the Income Tax Law No. (57) for the year 1985:

a-       The resident employee or worker whose income is limited to the job or employment from one party and simultaneously if such annual income does not exceed:

2400 Dinars for the Bachelor

3600 Dinars for the Married with no dependent children

4600 Dinars for the Married with one dependent child

5600 Dinars for the Married with two dependent children

6600 Dinars for the Married with three dependent children

7600 Dinars for the Married with four dependent children

8600 Dinars for the Married with five dependent children

Provided that, in respect of the none Jordanian taxpayer, his wife and dependent children are residing in the Kingdom.

b-       The taxpayer whose source of income is restricted to one car except the bus, trailer or refrigerator truck.

 c-      The taxpayer whose income is restricted to trading and his capital is less than one thousand Dinars.     

Article (2)

The exemption of the categories mentioned in the foregoing article from the submission of the annual returns does not prevent the submission of same if they so wish.

Article (3)

The exemption of the categories mentioned in article one of these Instructions from the submission of the annual personal assessment returns does not mean their exemption from the tax.

Article (4)

These Instructions shall be applied on the year 1996 and subsequent years and Instructions No. (2) for the year 1987 shall be repealed.

Instructions No. (9) for the year 1996⁽¹⁾

Instructions of Payment on the Tax Account and Dividing the

Tax due into Instalments

“Issued Pursuant to the provisions of

Article (28,36,37) of the Income Tax Law No. 57 for the

year 1985 as Amended”

Article (1)

The term “tax due” means the tax that must be paid as declared in the annual self assessment return provided for in Article (26) of the Income Tax Law No. (57) for the year 1985 and which must be paid in trust pursuant to Article (36) and the sums that must be paid on the account pursuant to Article (37) of the aforesaid law and also any definitive and final tax pursuant to the Law. This shall also include the imposed additions and fines.

Article (2)

Every taxpayer who has not presented an annual statement or return of his income for any year on the date legally fixed for that, must pay on the account of the tax due in that year a sum equal to 50% of the tax finally assessed within a deadline which will be the last day of the fourth month following the end of his financial year. In case there is no finally assessed tax, he shall pay (20%) of the assessed tax together with the legal fines immediately upon his receiving the assessment notice.

Article (3)

The Director or whoever he delegates in writing may split the due tax into instalments to be paid by the taxpayer upon the latter’s request in an application which has sound reasons calling for division into instalments. The Division into instalments shall be done in accordance with the following rules:

a-       As regards the taxpayer who presented an annual return of his income in which he declared a tax, the tax declared in the return shall be divided into instalments on the basis of paying a minimum of (25%) of his balance upon approval of the installment application. The rest shall be divided into monthly instalments not exceeding six in number or into a number of instalments ending with the end of the year, whichever is greater.

As regards the taxpayer who did not present his return, the balance of the tax due from him shall be divided into instalments on the basis of paying 50% thereof upon approval of the application while the remaining balance shall be divided into monthly instalments not exceeding six in number or into a number of instalments that end with the fiscal year’s end, whichever is less.

b-       As regards previous years’ taxes, they may be divided into instalments owing to sound reasons after paying a minimum down payment of 25% thereof and in accordance with the following arrangements:

1-       Pursuant to a decision by the Director of the concerned directorate or whoever he delegates and within a period not exceeding twelve months.

2-       If the amount of the tax due exceeds five thousand Dinars, the number of instalments may be raised to eighteen monthly instalments following a decision by the Director General or whoever he delegates.

 3-      If the amount due exceeds twenty five thousand Dinars, the number of instalments may be raised to twenty-four monthly installments by a decision of the Minister of Finance following a recommendation by the Director General.

c-If the taxpayer fails to pay any installment upon its maturity date , all unpaid instalments shall become due from him on the date of his default.

Article (4)

These Instructions shall go into operation as of January 1, 1997 and Instructions No. (2) for the year 1989 shall be repealed.