Income Tax Law

 Law No.57 of 1985 as amended by:

* Law No. ( 4 ) of 1992

** Law No. (14) of 1995

The Arabic text shall prevail

                  * Effective from Jan. 1St 1991 .

**      Effective from Jan. 1St 1996 .

Title and date of commencement

Article (1)

This law is named ( The Income Tax Law of 1995) and comes into effect on the date of publication in the Official Gazette.

Definitions of Terms

Article (2)

The following terms and expressions incorporated in this law shall have the meanings assigned to them hereunder unless the context indicates otherwise:-

The Minister : The Minister of Finance.

The Department : The Department of Income Tax.

The Director : Director General of the Income Tax Department.

The Tax : The Income Tax imposed in accordance with the provisions of this law.

The Assessing Officer : Any employee or a committee of employees delegated in writing by the Director General to assess or scrutinize the Income Tax.

The Person : The natural or juristic person with the exception of the resident ordinary company.

The Company : The Public or the private shareholding company and the non - resident ordinary company . The resident ordinary company is excluded. The co-operative society intended for profit is treated as a public shareholding company.

The Local Authority : Any municipal or rural council or a council of joint services or any similar authority or body established under the provisions of the law.

The Taxpayer : Every person obliged to pay Income Tax.

The Gross Income : The total amount of the taxpayer's incomes accruing from sources of income included in this law.

The Taxable Income : The remaining amount of the gross income after deductions and exemptions applicable under the provisions of this law are made.

The Building : An existing building including the garden or yard adjoining or surrounding it and is used or prepared to be used as part of it .

The Resident :

A. The natural Jordanian who usually resides in the Kingdom for a total period of not less than 120 consecutive or interrupted days per year.

B. The natural Jordanian if employed during any period of the year by the Government of the Kingdom or by any local authority within the Kingdom.

C. The natural non-Jordanian citizen who resides in the Kingdom for a total period not less than 183 consecutive or interrupted days per year.

D. The Juristic Person if registered in the Kingdom and has an office or a branch practising management or supervision of his activity in the Kingdom.

The Year : The period commencing of the lst day of January and ending on the 3lst of December of the same year.

Sources of Income

Article (3)

A) Income accrued or earned in the Kingdom from the following sources by any person shall be subject to tax : -

1) Profits or gains from any work, craft, business, profession or vocation regardless of the period during which such work , business, profession, craft or vocation may have been carried out or exercised and from any separate transaction or deal which is considered as trade or business.

2) Salaries, wages, allowances and bonuses received from any employment including the estimated annual value of housing or lodging or board or any other allowance with the exception of the hosting and representation allowances or part thereof as well as cost of living and travel allowances provided that the said allowances have been used for employment purposes and that the provisions of this paragraph are organised by instructions issued by the Director.

3) Interests, Commissions, discounts,and exchange differences . Interests and commissions, on doubted debts of banks, financial companies and specialized lending companies which are described as pending interests and commissions shall be taxed in the year it is received in accordance with the instructions issued by the Director for this purpose and approved by the Minister.

4) Earnings accrued from any contract concluded in the Kingdom such as profits of contractings, undertakings, tenders, agencies, commissions, representation, commercial mediation and the like whether their sources are from inside or outside the Kingdom.

5) Earnings accrued from any obligation ( undertaking) or annuity as well as income gained from wages and fees of consultation expertise, arbitration and the like.

6) Rents from any real estate and others accrued from immovable properties, dues, installments and other profits accruing from them.Also incomes and earnings derived from any property other than real estates and immovable properties.

 7) Key- money or vacating money. The person who has paid this money is permitted to amortize the amount as part of his permissible production costs or operation expenses for the purposes of this law and over an equally-divided period of 5 years. The beneficiary, likewise, is permitted to distribute the amount equally over a period of 5 years.

8) Amounts received in lieu of selling, hiring or concession granted for using any trade mark, design, patent or copyright and printing or any other compensation. Taxable income under this item is distributed over a period of 3 years.

9) Income gained from insurance business in all its forms,land transportation, shipping and air freight for both residents and non - residents .

10) Sale of assets governed by the rules of depreciation provided for in this law or transfer of its ownership through means other than inheritance . Taxable income from this source shall be determined to be equal to lower of the depreciation which has been deducted under this low or to the profit realized from sale or transfer of ownership .

11) profits or gains derived from any other source not included in items ( 1 to 10 ) of this subsection which have not been explicitly exempted under this law or any other law.

B - 1) All incomes, including interests, commissions, investment returns, profits of trading in currencies, valuable metals and securities which are realized outside the Kingdom by any Jordanian or resident and which are arising from his funds and deposits inside the Kingdom shall be taxable. Branches of Jordanian companies operating abroad shall not be subject to this clause. The income of the non-Jordanian which is realized abroad from the investment of his foreign capital, returns, profits and yields of liquidation of his investment or sale of his project or share or stocks after moving them out of the Kingdom according to the provisions of the Encouragement of Investment Law or any other effective legislation in the Kingdom, shall not also be subject to taxation under this clause.

2) (20%) of the net income, after deducting the foreign income tax, of the Jordanian companies branches operating outside the Kingdom as declared in their final accounts which are certified by an external auditor shall be taxable. In all cases the net amount resulting from applying that percentage shall be considered a taxable income to the company and shall be taxed at the rate for companies as stipulated in clause (2) of para(B) of article (17) of this law and no amount or portion of it may be deducted for any reason.

3) If the taxpayer is a company, income provided for in clause (1) of this paragraph, shall not be taxed again under clause (2).

4)The provisions of article (7) of this law shall not apply to the taxable income under this paragraph .

5)If a loss is incurred at any one year and to any person who is subject to the provisions of clauses (1&2) of this paragraph, it will be deducted from the income in each clause separately, upto the limits of such income. The balance, if any, shall be carried forward to the next year and so on up to six years after the year in which it has incurred and shall be deducted from the taxable income of that , provided that the taxpayer maintains due and proper accounts.

6)The provisions of para (B) shall be applicable to any Jordanian even if he holds another nationality in addition to this Jordanian one.

C )Profits earned from exportation shall be deemed to have beederived in the Kingdom , and the Council of Minister, may upon the recommendation of the Minister, exempt the profits of some exports from tax wholly or partially.

D)The income of the Jordanian partnership, the share of partners in apartnership by shares and a Jordanian limited partnership shall be distributed among these partners and each partners share from that income shall be added to his income from other sources.

E )Despite of any other law,the Council of Ministers can, upon a recommendation of the Minister, impose tax on the profits of any investment activity of any public institution or the surplus of its annual income, including government public institutions.

Article (4)

1.      The husband and wife are considered independent taxpayers.

2.      The taxpayer husband only enjoys exemptions and deductions prescribed under this law. These exemptions and deductions may be accorded partially or wholly the wife under the husbands request or if she is the sole supporter of the family.

C) The wife enjoys partial exemption from salaries, allowances, bonuses and appropriations included in provision of para (a) and paras (G) and (H) of Article (14) and the exemptions mentioned in Article (13) of this law for the person (S) she supports.

D) The husband and wife may be treated as one taxpayer, for the purpose of this law under their request. Assessment shall be made in the name of the husband. In such case tax shall be collected from one or both.

E) The husband is obliged to carry out all measures, and duties prescribed under this law relating to the effecting of the assessment, including the filing of annual returns, appearing before the assessing officer to present documents and the required detailed information on his income or his wife's income or both, unless requested otherwise by the wife.

Article (5)

A) The tax shall be imposed on the taxable income earned by any person or accrued during any year, after the end of this year subject to assessment, even though income may have ceased during it .

B) In the computation of taxable income or tax itself, the amount is lowered to the nearest Dinar.

Article (6)

The taxpayer who usually closes his accounts on a day other than the end of December is permitted to do so. In any such case, tax shall be collected on taxable income within one year ending on the same date. Such a taxpayer shall enjoy the deductions permitted in para (B) of Article (28) under this law, irrespective of the names of the months.

Article (7) :A) The following shall be fully exempted from Income Tax:

1- The official emoluments of the King.

2- The income of Local Authorities.

3- The income of Trade Unions accrued from business not for the purpose of profits.

4- The income of cooperative societies derived from a business not for profit purposes.

5- The income of any religious, charitable, educational, cultural, sport and health institutions of a public nature accrued from income not for profit purposes as well as income of charitable ( trusts) Waqfs, and the incomes of the Orphanage investments.

6- The income earned by a blind or a completely disabled person from craft or employment.

7- The pension salary accorded under the provisions of law and regulations.

8- Any lump-sum payment received as compensation or as indemnity for injury, termination of service or death.

9- The income accrued from land invested in agriculture, gardening and afforestation or from poultry, cattle, fish or bees breeding including income from the transformation of their products by simple manual labour.

10- The profits of re-insurance companies accrued from contracts concluded with insurance companies operating in the Kingdom .

11- Capital profits, profits accrued from the buying and selling of lands, real estate, shares and bonds are considered part of these capital profits except for the profits accruing from sale or transfer of ownership of assets governed by the rules of depreciation prescribed under this law, provided that losses arising from the sale or transfer of ownership of such assets governed by the rules of depreciation are deducted as soon as realized. This loss shall be limited to the lower of the depreciation deducted for the purposes of this law and the incurred loss.

12-The rental value of residential apartments occupied by their owners, if natural, his wife, his son or his brother or any of his ancestors or descendants, or occupied by owners if juristics, or any of their employees and workers for the purpose of dwelling with no charge, and in the latter case, exemption is restricted to the rental value for the owner and not for the employee or the worker who occupies it.

13- 10% of rents ccrued from leasing buildings inside the greater Amman municipality, and 30% of these rents in the remaining areas of the King dom.

14- The salaries and wages paid by a foreign company registered in the Kingdom under the Registration of Foreign Companies Law, to its non-Jordanian employees at its premises in the Kingdom.

15-The emoluments and allowances paid to diplomatic envoys , members of the Jordanian consular corps and government and public institutions'employees by virtue of their posts abroad .

B) The following shall be exempted from tax:-

1- The income of Public Institutions, with the exception of their income accrued from rents and key - money regardless of what is provided for in any other law, and in compliance with the provisions of para 13 (A) of this Article.

2- The income of any pension or Staff Provident Fund or any other similar fund if the said exemption is approved by the Minister.

3-The emoluments and salaries paid to diplomatic envoys and members of the non-Jordanian consular corps in their capacities as representatives of their countries in the Kingdom, and subject to reciprocal treatment.

4- Salaries and wages paid to non-Jordanian employees working with Jordanian Diplomatic or consular offices outside the Kingdom subject to reciprocal treatment.

5- The interest on treasury bills which are exempted under the law of public debt, development bonds, treasury loan debentures public institutions bonds and loan debentures of the public shareholding company.

6- The distributed profits of debentures ( Al Mukaradah ) .

7- A)The interests due to depositors if they are persons and companies from licensed Banks, Financial Companies, Companies entitled to accept deposits and Specialised Credit Institutions in the Kingdom.

B) The interests on deposits, at Banks, Licensed financial companies and other companies allowed to accept deposits, and specialized credit companies in the Kingdom due to banks and financial companies gained from the investment of the liquid part of the paid up capital and reserves and the profits carried forward on which tax has been paid. Such an exemption is to be applied for a period of 3 years from the date of establishment if the said interests have been gained from the investment of the liquid part of the paid up capital and reserves and the profits carried forward on which tax has been paid.

C )Other interests due to Banks and Licensed Financial Companies are taxable irrespective of the provisions of the Encouragement of Investment Law or the Housing Bank Law or any other Law .

8- The profits on deposits sharing in investments of Banks and Financial Companies which do not deal with interest and at the percentage of 9% per annum from the amount of the deposits.

9- profits or interests and commissions realized abroad and derived from non -residents,deposits in foreign currencies,provided that entry of such funds to the Kindom and the deposit thereof abroad is made in accordance with the regulations and instructions of the Central Bank of Jordan .For the purposes of this clause, the amounts of such funds deposited with the Central bank of Jordan in accordance its instruction shall be considered as deposited abroad .

10- The income gained from a concession granted or and agreement concluded by the government and which has been explicitly exempted from tax by the terms of the concession or the agreement as well as incomes exempted from tax by means of bilateral and multilateral agreements concluded by tgovernment.

11- The income included in agreementsonpreventing double taxation included by the government in-as-much as stipulated by these agreements.

12- The income explicitly exempted by the Encouragement of Investment Law and by means of the bilateral and multilateral agreements of encouraging investment concluded by the government according to the provisions contained therein.

13- The income earned from patent or copyright or reward subject to the Council of Ministers approval on the exemption.

14- Incomes and profits accrued to the Housing Bank from loans and facilities submitted to the Housing projects, but as for it's other Incomes and profits, which are not exempted in this Law , shall be taxable after the deduction of loss which may realize from loans and facilities that the Bank submits to the Housing projects, irrespective of any provision to the contrary of Housing Bank Law or any other law.

C)1-Tax-exempt incomes shall bear all expenses related to them.

2- Expenses of tax-exempt investments with banks, financial companies, companies accepting deposits, investment bank, savings and loans companies and specialized loan companies, is determined by dividing the income derived from the tax exempt investments by the total income and multiplying it by the total acceptable expenses under the provisions of this law with the exception of profits resulting from the purchase and sale of shares and other financial investments other than loan debentures in and outside Amman Financial Market, derived from the investment of funds accumulated from shareholders' equity less the net fixed assets as shown in the balance sheet of those parties where such expenses are determined at the rate of ( 25%) of those profits.

3-The Minister shall issue, upon recommendation of the Director, instructions implement the provisions of this paragraph.

Article (8)

The Council of Ministers may, upon the recommendation of the Minister and by order to be published in the official Gazette, decide partial or full exemption from tax of the interest on any loan accorded the public revenues of the Kingdom or a public institution by resident or non-resident financing sources. Upon the issue of such an order, the interest due on the loan shall be exempted from Income Tax as from the above date and to the extent specified in the order.

Deduction of Operating Expenses

Article (9)

In order to determine the amount of taxable income, the disbursements and expenses wholly and exclusively made or incurred for the production of the total income during the year, shall be deducted. Amongst these are:-

A)Murabaha profits or debit interest after excluding of profits and interest presented under clauses (7,8) of para (B) of article (7) of this law which belongs to public shareholding companies, limited liability companies and foreign companies .

B) Rentals paid.

C) Wages and salaries paid.

D) Taxes and fees paid.

E) Amounts paid by an employer to the Social Security Corporation for his employees or as a contribution to a pension or provident fund or any other fund established by the employer and approved by the Minister in the employees' interest.

F) Termination of service benefits paid.

G)1. Bad debts arising from any work or trade or craft or profession even if such debts were payable prior to the beginning of the year and each amount recovered in any one year from the amounts which were previously allowed to be deducted as bad debts shall be considered as an income during that year.

2. Any debt or part thereof, shall be considered a bad debt if it is can't be collected due to one of the following reasons:

- Bankruptcy or insolvency of the debtor.

- Making compromise conciliation with his creditors.

- His death without leaving an inheritance sufficient to wholly or partially repay his debts.

- His disappearance or travel and severance of his news, while there are no properties to be sufficient to wholly or partially repay his debts

- Inability of the debtor to repay despite demands for payments through available means and the debts or any part thereof was not covered by adequate guarantees and the debtor did not have sufficient movable or immovable properties to be foreclosed on under a hand written declaration from the creditor and in the following sequence:

- After the lapse of 12 months from the date of his notification in writing that he has defaulted in paying for amounts from JD. 1 to 100000.

- After the lapse of 24 months from the date of notifying him in writing that he has defaulted in paying for the amounts from JD. 100001-500000.

- After the lapse of 36 months from the date of notifying him in writing that he has defaulted in paying for amounts above JD. 500000.

3. The Minister shall issue upon recommendation of the Director instructions to implement the provisions of this paragraph, including the write-off of bad debts on annual installments not to exceed one hundred thousand dinars, or (25%) of the net income, whichever is more, before the deduction of this expense. As for bad debts on which judicial rulings have issued but were not implemented, they will be completely deducted in accordance with the provisions of this paragraph . These instructions may require maintenance of due and proper accounts for certain categories of taxpayers.

H) Amounts, expended for the repair of real property, equipment and machinery or for the renewal, replacement or alteration of spare parts, tools or materials used for the purpose of producing the income.

I) Amounts expended on replacement of equipment and machineries used in the work and which are rendered unusable.

These are calculated on the basis of the cost of equipment or machinery replaced minus the value of selling and the amounts previously deducted as a depreciation.

J) Depreciation and wear and tear of buildings , equipment , machinery and furniture owned by the taxpayer, or those in his possession for the purpose of owning them soon or in the future and which are used in generating income will be determined as a percentage of their original cost as per instructions issued by the Minister upon recommendation of the Director and published in the Official Gazette and should include, among other things, adoption of the accelerated depreciation method.

When deductions are made, the following rules should be observed:

1- The value of land should not be depreciated.

2- All information relating to assets for which depreciation is claimed should be submitted in accordance with instructions issued by the Minister.

3- The total deduction of depreciation and wear and tear should not, under this law and other previous laws, exceed the original cost.

4- If the gross income at any year is less than the depreciation, the balance thereof should be carried forward to the next year or following years.

K) Establishment and pre-operation expenses including the feasibility study expenses shall be amortized over a period to be fixed by the taxpayer but not exceeding 5 years from the date of earning profits.

L) The share of the branch in the costs of the center or Head Office situated outside the Kingdom provided that the permissible amount of deduction does not exceed 5% of the taxable income earned by the branch inside the Kingdom.

M) Hosting and travel expenses incurred by the taxpayer in accordance with instructions and basis issued by the Director and approved by the Minister.

N) Expenditures incurred from training of employees and labourers and their medical treatment, meals during duty, travel, transport and life insurance against work injuries or death in accordance with instructions issued by the Director under the approval of the Minister.

O) Expenses of training, marketing, researcand development in accordance with instructions to be issued by the Minister upon recommendation of the Director.

P) Expenses of previous years which were not specific and final.

Q) Expenses of the previous four years which were not deducted in those years due to oversight or error.

Article (10)

A) If any person sustains a loss during the year from one of the sources of his taxable income, under the provisions of this law, this shall be deducted from his total income froothersources in the same year.

B) If the total loss has reached an amount which can not be wholly deducted as mentioned in the previous paragraph, the balance of this loss shall be carried forward to the next year and then to the subsequent years up to six years after the year when loss occurred. The balance carried forward to each year is deducted from that taxable income of that year.

C) A loss that if being a profit will not be taxable by terms of this law shall not be allowed to be deducted.

D) Loss should not be deducted or carried forward unless correct and proper accounts are submitted by the taxpayer.

Article (11)

Deductions are not permitted in respect of the following : -

A) Household, private and personal expenses.

B) The cost of any construction or improvements which increases the capital value.

C) Amounts withdrawn from capital intended to be employed as capital in any activity.

D) Any loss or expenses recoverable under an Insurance Policy or a compensation contract.

E) Any capital loss.

F) Amounts earmarked as compulsory reserve or optional reserve or any other reserves with the exception of insurance reserves according to the instructions issued by the Director.

G) Amounts paid as income tax or social services tax.

H) Any capital disbursements.

I ) Any salaries or wages or any other amount taxable by the terms of this law, unless tax was deducted and paid to the Income Tax Department in case the provisions of this law or any other regulation issued in that respect stipulate deducting and paying the tax .

J) Any wages, salaries or any other monies however cited received by a partner in consideration of his work in or management of a joint liability company, or received by the director who is a partner thereof, or monies received by a shareholder in consideration of his work in or management of any limited private company which exceeds 3600 Dinars per year for each managing partner or working shareholder. But this shall not affect the application of tax on the real amount for wages, salaries or any other amount received by him from his work for the company or in its management, and paying the tax due thereupon according to the provisions of this law provided that the tax due on the excess amount beyond the JD 3600 , apart from his other incomes, of that salary or wage or the other amount shall be deducted from the tax due on that company. The partners in the joint liability company are treated on this base, each according to his share in the company.

Article (12)

A) Any amount that has been paid during the year as a donation for the Government of the Kingdom or for its Armed Forces or its public institutions or for its local authorities is permitted to be deducted from the taxable income during the year in which the said amount has been paid.

B) Any person is permitted to deduct from his taxable income any amount which he paid in the Kingdom as a donation or contribution to a charitable or humanitarian, scientific, cultural or sport cause, if such cause has been recognized by the Council of Ministers provided that deductible amounts under the provisions of this law do not exceed one quarter of the taxable income before making this deduction and after making the deduction provided for in Para (A) of this article.

Personal , Family , Dependents and University Exemptions

Article (13): In order to determine the taxable income :

A) The natural resident person shall enjoy the following exemptions:

- An amount of JD 1000 as a personal exemption.

- An amount of JD 500 for his wife and each one of his children who is supported by him and for each of his parents if he supports him .

- An amount of JD 200 for each dependent whom the taxpayer is required legally to support and at a maximum of JD 1000. It is required that exemption on the supported person is not allowed for more than one taxpayer.

It is required for granting exemption relating to the wife, children, parents and dependents of the non-Jordanian to be residents in the Kingdom.

B) The natural non-resident Jordanian person shall enjoy the exemptions relating to the wife, children and dependents who are residents in the Kingdom if that person was responsible for supporting them.

C) The natural Jordanian person shall enjoy an exemption of JD(1500) per year if he is a taxpayer and at the same time a student at a university or community college or an institute beyond the level of the general secondary certificate and does not have a scholarship.

D) The natural Jordanian person shall enjoy an exemption of JD(1500) per year if he pays for the education of any of his sons or grandsons or wife or brother or sister, who are under his support and have no scholarships and unable to support themselves and if being a student at a university or community college or institute beyond the level of secondary school certificate. If numerous taxpayers spend for the education of one student who does not enjoy a scholarship, the amount of exemption shall be proportionately divided among them.

E) The council of Ministers should reconsider the exemptions provided for under this article once or more each five years in light of the price index of the cost of living.

Article (14)

A) 1. (50%) of the salaries, wages, allowances, bonuses and appropriations paid by government, public institutions and local authorities to their employees shall be exempted from income tax.

2. (50%) of the first twelve thousand and (25%) of the amount above that for salaries, wages, allowances, bonuses and appropriations paid to the employees by institutions other than those provided for in clause (1) of this paragraph shall be exempted from income tax.

B) The rent paid by the resident taxpayer or his wife for his house in the Kingdom shall be exempted from tax, whether the lease agreement was in his name or that of his wife, provided that the total amount exempted under this paragraph shall not exceed JD. ( 2000) per annum.

C) Any amount paid by the resident or his wife as interest for a loan which he disbursed to construct or purchase a house in the Kingdom or for the amount of profit paid by him or by his wife to any bank or company that does not deal with interest against the construction or purchase of such house. This exemption is conditioned on that the person and his wife or either one or any of his ancestors or descendants occupy this house and that the interest or profit amount which is permissible to be exempted in this case shall not exceed two thousand Dinars whether the house is the property of the husband or the wife or any one of them was the borrower.

D)The amount paid by the resident for a surgical operation performed in the Kingdom for him or for a dependent whom he is legally responsible for and also the amount paid for hospitalization at any hospital in the Kingdom shall be exempted from tax.

E) Any amount paid by the resident for incurable illness treatment for him or for a dependent whom he is legally responsible according to instructions and regulations issued by the Minister upon a recommendation of the Director,

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provided that the total amount shall not exceed JD(5,000) per annum for treatment and medication of such illnesses in the Kingdom and JD( 10000) outside the Kingdom.

F) Any amount paid by the resident for a surgical operation performed on him outside the Kingdom or on a dependent whom he is legally responsible for whereas the operation is an emergency one or cannot be performed inside the Kingdom according to instructions laid down by the Minister upon a recommendation of the Director, provided that the total amount exempted under this paragrshall not exceed JD(5000) per annum.

G) The employee's contribution to the Social Security Corporation or a provident fund, or medical insurance or pension or any other similar fund approved by the Minister shall be exempted from tax .

H)The employee's payment in lieu of purchasing years of service in pursuance of the Social Security Corporation's Law shall be exempted from tax.

Article (15)

Notwithstanding anything to the contrary contained in this law, the taxable incoof insurance companies dealing in life inswhich isubject to tax is estimated at the equivalent of 10% of the total amount of insurance premiums due to the company for life insurance. No deductions are allowed on this amount or part of this amount for any reason whatsoever.

Article (16)

A) The expression act of disposal shall, for the purpose of this Article, include the creation of a trust ( Waqf) from any assets or when the assets are donated and any other arrangements for their transfer, or their yield.

B) Income earned from any act of disposal by a taxpayer in favour of any of his sons who is not yet 18 years at the beginning of the year during which income has been gained, shall be deemed, for the purpose of this law, to be income for that person who carries out the act of disposal.

C) Income from a revocable act of disposal, whether, such act was carried out before or after the implementation of this law, such income shall be deemed to be income for the person who carried out the act of disposal.

D) An act of disposal shall be deemed revocable revocable if it contains provisions for the transfer or the retransfer of the income to the person who carried out the act of disposal or if given the right of control over the income, or the right of control of the assets from which the income directly or indirectly results.

E) If a person or persons who have common interests in a project or more carry out business or financial transactions between them and those projects or among those projects and such transactions are different from those conducted in the market and they result in reduction in taxable profits for any of them or any of those projects, such transactions shall be ignored and the real profits will be assessed according to the practices normally followed in the market.

F) Any artificial or fictitious act of disposal shall be disregarded and tax shall be assessed on the concerned taxpayer as if there is no such an act.

Article (17)

A) The tax on taxable income of any person, except for companies, shall be charged at the following rates:

On every dinar of the first 2000 Dinars 5 %

On every dinar of the next 2000 Dinars 10 %

On every dinar of the next 4000 Dinars 15 %

On every dinar of the next 4000 Dinars 20 %

On every dinar of the next 4000 Dinars 25 %

On every dinar in excess of the above 30 %

B) The tax on taxable income of companies shall be charged as follows:

1 - At the rate of (15%) of that income generated from a project in one of the following sectors:

a. Metallurgy

b. Industry

c. Hotels

d. Hospitals

e. Transportation that the paid up capital of the company shall not be less than one million Dinars.

f. Constructional contracts, provided that the paid up capital of the company shall not be less than one million Dinars.

g. Any other sector or activity decided by the Council of Ministers upon a joint recommendation of the Minister and Minister of industry and trade.

2- At the rate of (35%) of that income for banks, financial companies, insurance companies, exchange companies and intermediation companies.

In all cases, it shall be conditioned that the paid tax, prior to any set-off, by banks, financial companies and insurance companies under this paragraph, shall not be less than (25%) of their net annual income as shown in their accounts and from their all sources of income taxable and exempted derived in the Kingdom prior to any distributions made therefrom and without prejudice to the provisions of article (10) of this law.

3- At the rate of (25%) of the taxable income of other companies.

C) Tax collected from companies shall be considered as final and can not be refunded or set-off for any shareholder of partner in the company under any one of the provisions of this law.

D) The Minister shall be entitled, upon a recommendation of the Director, to issue instructions necessary for the implementation of the provisions of this article.

E) To agree the provisions of this law with those of the companies law, the word ( company) shall mean the following except otherwise stipulated in this law or otherwise denoted by the text thereof.

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

2- Limited liability company.

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

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

5 - Foreign company or its branch of any type and whether it is resident or non-resident.

Article (17 repeated)

A)1. Profits of shares and distributed dividends of the company from which tax is charged on its taxable income under the provisions of this law shall be subject to a distribution tax at the rate of (10%) of the profits and the distributed shares except for the profits distributed in the from of shares and contributions to increase the capital. This tax shall be withheld by the distributing company and shall be paid to the Tax Department within thirty days from the date of withholding.

2. The distribution tax provided for in clause (1) of this paragraph and withheld from the profits and dividends of any person shall be considered as withheld and final tax and it can not be refunded or set-off under any of the provisions of this law. The balance of those profits and dividends shall be exempted from the tax and from the distribution tax provided that such balance is governed by the provisions of Para(C) of article (7) of this law.

3. If any company defaults in deducting and paying the distribution tax provided for in clause (1) of this paragraph during the prescribed period, such tax will be collected therefrom, in addition to a penalty at the rate of (1.5%) of its value for each month of default in payment, and the company will not be entitled to have recourse to the shareholder in respect of that tax or penalty entailed thereon.

B) For the purpose of this article, the profits transferred abroad by any foreign company operating in the Kingdom shall be considered as distributed profits and the tax withheld therefrom shall be considered as withheld and final distribution tax which can not be refunded or set-off under any of the provisions of this law.

C) The amounts drawn by any partner of the company in the form of advances or loans or the similar, are considered distribution of profits for the purposes of this article except for the amounts drawn as loans from banks and financial companies.

Deduction of Tax

Article (18) :A) Every person, on paying income, which is not exempted from income tax, to a non-resident, either directly or through brokerage must deduct 10% of this amount and prepare a statement showing the amount of income and the sum deducted therefrom and must furnish the Income Tax Department and the beneficiary with a copy of this statement. The amount deducted therefrom shall be paid to the said Department within a period of one month from the date on which the deduction was made.

B)The resident person who is a legal agent or commercial agent, a branch or a partner to a non-resident taxpayer, or has a commercial relation with him, shall be responsible to act on behalf of that non-resident taxpayer in all matters, procedures and duties provided for in this law.

Article (19)

A) Every person responsible for the payment of taxable wages, salaries, bonuses or allocations, shall at the time of payment deduct tax estimated thereon. He shall prepare and submit to the Income Tax Department a declaration of the deducted amounts and pay these amounts monthly.

B)The Assessing Officermay consider amounts deducted in accordance with Para (A) above as final taxes and he may set off these amounts from the tax due in the year in which the deduction was made or in the preceding or following year. He shall have the right to review the matter within a period not exceeding 4 years subsequent to the date of deduction.

C)The Assessing Officer authorized in writing by the Director may enter upon the premises of any employer and inspect any books, records or any other documents relating to deduction and he may question those concerned in order tensure compliance with the provisof this sectionin respect of effecting the deduction .

D)If any person fails to deduct or pay tax due on him under the provisions of this article, the tax which has not been deducted and paid shall be recovered and collected as if it were tax due from such person.

Set-off of Tax Deducted Against Tax Due.

Article (20)

Every amount withheld in accordance with articles (18,19) of this law shall be reconciled against tax imposed on taxable income of the person who received that income for the year in which the withhelding was made or any other preceeding or following year.

Article (21)

Property and Land within municipal areas Tax which is paid by the taxpayer for the leased building or land from which he earned such income is set-off against tax due on him under the provision of this law provided that the maximum amount so set off shall not exceed the amount of income tax due for that year.

Article (22)

A) The Director may issue instructions for any category of taxpayers which he may designate to keep accounts of their income and expenditures and to prescribe in such instructions the methods and rules to be observed in maintaining such accounts provided that they do not conflict with the provisions of the Code of Commerce in force and that such instructions shall be published in the Official Gazette.

B)Any person who fails to comply with the instructions of the Director issued in accordance with the provisions of Para(A)of this article which are applicable to him, or who fails to submit the books of account which he has kept in accordance with such instructions, shall be deemed to have committed an offence in violation of this law.

C)Persons licensed to carry out the profession of auditing in the Kingdom must submit to the Income Tax Department a list of all their clients and their addresses whose books of account they have kept or audited whether such clients are subject to the provisions of this article or not. Such list must be submitted not later than March 31st of the subsequent year. Failing to do this, the licensed auditors shall be penalized by imprisonment for a period of no less than one month and not exceeding six months, or a fine of not less than JD 500 and not exceeding JD 1000. In case of recurrence the licence of auditing shall be withdrawn.

D)The Director upon the approval of the Minister, may prohibit the account auditors examiner or those in charge of audit offices from referring to Assessing Officers on matters or actions which are not personal if he was convinced that through his contacts and dealing with the Income Tax Department the latter has disreputed the department or his own job or has abused the law or regulations and instructions issued thereby. The Minister may issue an order to be published in the Official Gazette and in one local newspaper at least incorporating the Department's unacceptance of the accounts prepared or audited by the said accountant or by the auditor or the owner of an audit office for a period of time he deems appropriate.

Article (23)

A) The Director or any employee designated by him in writing may require any authority to furnish him, with the information which may be necessary for the purposes of effecting this law provided that government, public institutions and local authorities employees do not disclose any particulars or details which, under the provision of this law, they are obliged not to disclose . It is also stipulated that secrecy of banking operations is not to be divulged.

B) The Director or any employee designated by him in writing may enter any place of business and inspect the goods in stock, cash, equipment, machinery, books of accounts, record and other documents relating to that business. The said records, books of account and documents may be seized for a period not exceeding 20 days and once in a year if he deemed it necessary for enactment of the provisions of this law.

Article (24)

Any person is permitted to designate, in writing, another person to represent him in any of his income assessment procedures at the Income Tax Department which are prescribed by this law.

Article (25)

A) A notice issued by means of this law may be delivered to any person either personally or by sending it through registered mail to his last known business or private address and shall, in the latter case, be deemed to have been delivered in the case of a person resident in the Kingdom, not latter than 10 days from the date of posting and in the case of a person not resident in the Kingdom, on the day following the date on which it would have reached its destination in the ordinary mail, and in proving such service, it shall be sufficient to prove that the letter containing such notice was duly addressed and posted and any notice sent under this subsection shall be deemed to have been duly delivered to the person to whom it is addressed even if he refuses to accept it. For the purposes of this article, the word " Notice " shall include all correspondence issued by the Department including the lists, Summons and tax assessment notices.

B) If it was impossible to send a notice in accordance with the provisions of Para (a) of this article, the Director shall make notice by publishing it in two local daily newspapers for at least two times and such publishing shall be considered as legal notification from all aspects.

C) Notwithstanding anything to the contrary contained in any other law, all returns, information and correspondence arising therefrom, in accordance with the provisions of this law, as well as tax payments, may be sent postage free by post to the assessing officer in envelopes marked ( Income Tax ).

D) All applications, objections and correspondence arising therefrom shall be exempted from revenue stamps .

Assessment Procedures Returns

Article (26)

A) Every person, who has taxable source or sources of income should submit, no later than the last day in the fourth month subsequent to his fiscal year, to the concerned Income Tax Assessing Office a Return including all details relating to his gross and taxable income and tax due on him from previous year.

B) The act of posting the returns by registered mail within the period stipulated here above is considered as an act of submitting it in accordance with the provisions of this Article.

C) The Director may, under certain instructions issued by him for organizational purposes, exempt, temporarily, some categories of taxpayers from submitting the said Returns.

D) The information mentioned in the Returns of self-assessment is not considered as an evidence to the taxpayer's income for the years preceding the enforcement of this law.

The Director's authority to request certain categories

of Taxpayers to submit Returns.

Article (27)

A) The Director may give notice to certain individuals or categories in the form of an order published in the Official Gazette and in one local newspaper or more to submit the Returns stipulated under Article (26) and at dates specified therein. 2% is to be added to the tax due in respect of every month of failure to file the Return by the taxpayer covered by the above mentioned decision provided that the total sum of additional tax does not exceed 24% of the tax due in accordance with instructions issued by the Director to that effect.

B)The Director may cancel or reduce the additional tax stipulated under Para (A) of this Article if he was convinced that the delay in the Returns was for reasonable reasons.

Article (28)

A) Every taxpayer is obliged to pay the amount of tax admitted in the Return or the amount due on him as a down -payment towards the liquidation of the amount due on him and which is approved by the Director. The above person should enclose together with his Return a receipt voucher or anything that proves that he has paid the amounts stipulated in this Article within the period specified in Article 26 of this law.

B)Every person who has submitted a correct Return and paid the tax declared enjoys the right to deduct 6% of the tax due if the payment is made within the Subject year covered by the return or during the first following monthand 4% if the payment is madduring the second fomonth and 2% if the payment is made during the third following month of this year. Similar deduction is granted for any amount paid on the a/c or deducted and paid.

C)If it was approved to allow the taxpayer to pay the amount of tax admitted by installments, the said taxpayer has the right to enjoy the deduction prescribed in Para (B) here above in respect of amounts that have been paid on the above specified dates.

Self assessment in case of submitting the Return

Article (29)

A) The Assessing Officer is to scrutinize the Return mentioned under Article 26 & 27 which is submitted by the taxpayer. If he has any reason to believe that the said Return is partially or wholly incorrect, he shall send his remarks or comments in writing to the taxpayer and request him to attend a meeting that he sets in order to discuss the matter in question. As a result of this meeting, the following items are appended:-

1- If the taxpayer agrees to amend his return, tax is determined on the basis of the amended amount. The taxpayer will be so notified, by written notice.

2- If the taxpayer refuse to amend return submitted by him, the Assessing Officer shall estimate the taxpayer's taxable income and the tax due thereon in the light of information available to him and the memo provided for in Para (a) of this article. He should make reasoning for each separate item of his decision showing the reasons which made him disbelieve of the taxpayer's view points, otherwise such item will be considered as agreed upon and the taxpayer shall be notified of this in writing and this decision shall be subject to objection within thirty days from the date of notice.

B) If no notice has been served to the taxpayer in accordance with Para (a) of the article disapproving his personal assessment within one year from the date of receipt of the return submitted by him to the Income Tax Department then his personal assessment is considered as approve by the Assessing Officer.

Income assessment in case of failure

to submit a Return by a Taxpayer

Article (30)

In cases when a taxpayer has not submitted a Return referred to in Article 26 & 27 of this law at the dates fixed therein, the assessing officer determines the taxable income of this person in the light of the information available to him and a notice of the tax due shall be served upon him.

Article (31)

A) Any person who has been subject to tax assessment under the provisions of clause (2) of Para (a) of article (29) and article (30) of this law may object to such assessment in writing within thirty days from the date of serving the notice of assessment. Such notice must state the grounds on which he bases his objection.

B)If the said objection has been submitted after termination of the period and if the assessing officer is satisfied that the person in question was unable to submit his objection within the aforesaid period due to his absence from the Kingdom, sickness or any other reasonable cause, the assessing officer may extend the said period as may be deemed reasonable .

C)The objector should pay, in advance, on submitting his objection, a sum equivalent to the amount of the tax admitted by himself in the statement of objection.

D)On applying the provisions of Para (C) of this article any amount paid by the objector on the account of the year/ years of objection in any way in accordance with the provisions of this law including those of Article (37) shall be taken into consideration.

E)The objection is to be dismissed if the amounts specified in Para (C) of this Article were not paid.

F)The assessing officer summons the objector to a meeting to consider his objection and the objector has the right to give evidence of his objection and the assessing officer has the right to request the necessary information and details as well as the necessary records and documents relating to the income of the objector. The assessor may question any person that he thinks has information relating to the assessment in question provided that the assessing officer does not question the employee or the client or any other person that have access to the personal matters of the objector without the prior approval of the latter.

G)If the assessing officer agrees to the amount stated by the objector, the assessment shall be amended accordingly.

H)If the assessing officer does not give his consent as referred to in the preceding Para of this article he may issue a reasoned decision confirming the assessment objected to or may reduce, increase or cancel it . The decision made in accordance with the provisions of this Para shall be subject to appeal .

I)In all cases, the assessing officer shall notify, in writing, the objector about the outcome of his objection.

Article (32)

A) In cases where the final assessed tax due upon any person ( other than shareholding companies) for any year of assessment does not exceed 200 Dinars, the Director may consider such tax as a basic tax fixed for every year of the following years up to five years, and the taxpayer concerned shall pay such tax within 30 days from the end of each of the aforesaid years to which it applies. The Director may cancel such decision.

B)Notwithstanding any text to the contrary, the Director may take a decision imposing a fixed annual tax on any category or certain categories of taxpayers. He shall, under the above decision - specify the taxable incomes and the years applicable thereto. The Director may, in writing, entrust the job to the Assessing Officer.

C)Any person to whom the fixed basic tax applies under the provisions of the preceding paras may apply to the Director for reconsideration of the tax provided that such application is submitted within 30 days from the end of any taxable year and the Director may reduce or cancel the tax accordingly.

Article (33)

A) The Minister or the employee authorized by him in writing may, during the year or within four years from the expiration of the year during which the return has been submitted or a notice of assessment has been served under the provisions of Article 29,30 and 31 of this law, reconsider the self assessment and any procedures adopted by the assessing officer provided that the Minister or employee authorized by him shall take a decision not to reduce the tax except in the following cases:-

1. For purposes of correcting arithmetical errors.

2. For purposes of adjusting personal and family and university deductions provided for in article (13) & (14) as well as the setting- off provided for in Article 18, 19 of this law.

3. In cases where tax due in accordance with the provisions of art. 29, 30 and 31 of this law does not exceed JD 1000 - before any setting-off is effected.

B)The Minister or the employee authorized by him in writing may reconsider the assessment of the income of any person from any source which was not one of the matters or facts on the merits of which the court gave its ruling when it examined the assessment as a matter of appeal or cassation.

C)The decision issued in accordance with the provision of this article which involves an increase or reduction of the tax due on the taxable income is subject to appeal provided that the Minister or the employee authorized by him shall not take a decision which involves an increaseor reduction in the tax unless in cases of misapplication of the law or a decision ignoring a fact or an action or due to the existence of an income which was not handled at that time .

In the case of increasing the tax , the Minister or the employee authorized by him has to produce and evidence to this effect not withstanding any other text, and a fair opportunity should be given to the taxpayer to hear his statements and to expound his case.

Appeal and Cassation

Article (34)

A) ( The Income Tax Court Of Appeal) shall be competent to reconsider appeals against assessment orders and decisions which are allowed to be appealed under the provisions of this law. It is a special court situated in Amman, constituted within the Ministry of Justice and shall be composed of a President Judge whose rank is not below the grade 2 2 other judgeas members the rank of eis not below the grade 4 and all of whom shall be subject to the legal provisions and conditions applicable to regular judges.The said court shall commence to exercise its competence in accordance with this law and the regulations enacted thereunder as well as the provisions of Code of Civil Procedures and shall hold its hearings at its premises or at any other place that it deems fit.

B) Income tax appeals submitted to the above-mentioned Court shall be treated as urgent cases and pleadings shall be heard not in public unless the court rules otherwise. The person who issued the assessment decision or reassessment decision, as the case may be, shall be cited as the defendant.

C)1- Prescribed fee for each year shall be collected separately.

2-The appealant must state in his statement of appeal the amount of the assessed tax which, he admits for each year and must submit to the Court with his statement of appeal a receipt of payment of that amount approved by the Director. Failure to pay the aforesaid amount as therein prescribed shall be cause to dismiss the appeal.

D)The onus of proving that the assessment for which the appeal has been filed is excessive, shall be on the appealant. It shall not be permissible to prove any facts which were not claimed before the respondent whose decision is contested.

E)The Court may approve, reduce , increase or cancel the assessment, or it may remit the case to the defendant to make a re-assessment in accordance with any directions which the Court may deem fit to issue. The Court may, in all cases where it decides to dismiss the appeal wholly or partially, order a payment of an additional amount equal to 10% of the amount which is not admitted by the appealant from the tax which is payable under the Court judgment for every year during which the case was before the Court.

F)Where an appeal against an order or assessment issued under the provisions of Article (33) of this law is submitted by a taxpayer who had already submitted an appeal against an order made by the assessing officer and where both appeals relate to the same year of assessment, the court shall:

1- Require payment by the appealant of the difference between fees due on such appeal and those due or paid in respect of the appeal previously submitted against the decision of the assessing officer.

2- Consider the new appeal submitted and drop the appeal previously submitted against the assessing officer.

G)With the exception of what is provided for in item B, C of Para (2) of Art. (10) of "The Establishment of Civil Courts Law " No. (26) for the year 1952 , every judgment or order issued by the Court in this regard shall be final and not subject to cassation unless the amount of income tax assessed by the assessing officer , Minister or the person authorized by him exceeds 1000 Dinars before any setting-off is made.

H)The assessing officer shall notify the taxpayer in writing of the amount of tax due in accordance with the court judgment.

Article (35)

The Minister or the person authorized by him or the assessing officer may at any time and under certain circumstances, correct, of his own free will or upon the request of the taxpayer, the arithmetical or writing errors that are found in decisions, notices and memos due to oversight. Procedures of this correction are not subject to rebuttal.

Article (36)

A) 1. Every taxpayer should pay the tax due on him at the dates specified in this law. If no certain date is specified for payment, the tax will be considered due,as a maximum, on the last day of the fourth month of the taxpayer's financial year end.

2. No penalty shall be imposed on the taxpayer before the tax due thereon has become final and if he has paid the tax which he approved in his return in addition to (50%) of the amount in question of disagreement as a payment in trust to be paid by him during thirty days from the date on which the assessment notice is served to him. Such payment will be repaid to him after deducting the due tax amount, in addition to an interest to be calculated for him on the refunded amount on the basis of the interest rate of treasury bonds from the date of payment up to the date of refunding thereof. If this is not made, he will be subject to a penalty at the rate of ( 1.5%) per month on the unpaid amount which exceeds ( 30%) of the amount in question of disagreement in case of its realization and after one year of the date specified in clause (1) of this paragraph, provided that the penalty shall not exceed in this case (50%) of that amount.

3. The Minister shall issue, upon a recommendation of the Director, instructions to allow for payment of tax on installment basis.

B) Every liquidator of a company or an estate or bankruptcy or insolvency or compromise or any person responsible for any similar liquidation or settlement of any type should inform the Director in writing of the commencement of liquidation procedures to state and recognize the due tax amounts. In case of default in doing so, each of the above shall be directly and personally responsible for the payment of such amounts in accordance with the provisions of the law, provided that this ruling will not exempt the heirs from paying such amount out of any movable or immovable funds descended to them from the estate.

C) Every trustee or guardian or custodian of any property, has to pay the tax due on arising or resulting income therefrom and who is vested with the responsibility of its management and at the prescribed dates of the payment thereof in accordance with the provisions of this law.

Article (37)

A) A taxpayer who has not submitted an annual Return of his income ar any year of assessment at the date stipulated in this law shall pay an amount equal to 50% of " final tax assessed." If there was no tax finally assessed, he should pay 20% of the amount of tax assessed as per the stipulated method and at dates specified by instructions issued by the Director for that purpose.

B)For the purposes of this Article the expression " Final tax assessed" shall mean in relation to any person, the tax due for the latest year of assessment in which tax has become fixed.

C)The provisions of Para (A) of this Art. are not applicable to taxpayers whose taxable income consists of a rate of 70% or more of taxable income in respect of salaries, wages, bonuses, or commitment or annuity provided for under subsection ( 2&5) of Para (A) of Art. (3) of this law.

D)Every payment made by any person under the provisions of this article, for the purpose of tax collection, shall be set off against tax imposed on the taxable income of that person for the assessment year in respect of which such payments were made, or against the tax imposed on his taxable income for the previous or following year of assessment.

Article (38)

A) If the tax is not paid within the period prescribed under this law , an additional amount of 1.5% shall be added to the amount of unpaid tax for each month of delay. The provisions of this law relating to the collection of taxes shall be applicable to the collection of this additional amount.

B)The additional amount paid under the provisions of this article is not considered as part of the tax.

Article (39)

If the tax was not paid within the period prescribed under the provisions of this law, the assessing officer shall notify the taxpayer by means of a memo requesting him to pay the tax due on him within a period stipulated by the assessor. If payment is not effected within the period prescribed in the said memo, the assessing officer may proceed forthwith to enforce payment in accordance with the provisions of the Law of Collection of Government Funds in force, and shall, in such a case exercise the powers vested in the Administrative Governor, and the Committee for the Collection of Government Funds provided for under the aforesaid law.

Article (40)

A) The assessing officer may assess the income of any person who is about to leave the Kingdom for good before the end of the year of assessment. He may impose the tax due on him in respect of the previous period of the year of assessment ancollect tax within 10 days from sera written notice for him. The Director may also request the competent authorities not to permit the taxpayer to leave the Kingdom before the settlement of his case or before furnishing a security for payment of the tax.

B)Notwithstanding the contents of any other law the prime Minister may, upon the recommendation of the Minister, issue any orders deemed necessary for the purpose of collecting tax due on taxpayers. He is also authorized to prevent the taxpayers who failed to pay their dues from leaving the country.

Refunds

Article (41)

A) If it is proved that any person has paid tax for any year by deduction or otherwise exceeding the correct amount due for him, such person shall be entitled to a refund of such excess and the assessing officer shall issue a certificate for the amount to be refunded and the Ministry of Finance shall refund, upon receipt of the said certificate, the amount specified therein.

B)Any person who has been done injustice by a decision of the assessing officer regarding the amount to be refunded under the provisions of this article shall have the right to appeal the said decision before the Income Tax Court of Appeal.

Offences and Penalties

Article (42)

Any person who willfully evades or tries to evade the payment of tax or who helps or urges others to evade payment of tax by willingly commiting any of the following acts:-

A)Submits an incorrect statement of account by omitting therefrom or understating therein or not mentioning any income or part of any income in respect of which he is required under this law to submit and which substantially affects the amount of tax due on him.

B)Makes a false statement or a fictitious or incorrect entry in any Return or statement submitted under this law .

C)Prepares, keeps or allows the preparation of any fictitious or false books, accounts or records or falsifies or allows the falsification of any books, accounts or records, or hides or destroys wholly or partially, such books, accounts or records with the intention of concealing any income taxable under this law, or any part of such income, or to evade the payment of tax wholly or partially or to obtain illegally an exemption, reduction or set-off permissible by law.

D)Resorts to any fraud or deceit of any kind or allows the use of such means to evade the payment of tax or to reduce its amount in any way.

E)Refrains to provide information requested from him or provides incorrect information or data in respect of any event or matter or issue which may affect his liability or that of any other person for paying the income tax or undermining the amount of such tax.

F)Gives any false reply in writing, to any question or request addressed to him for the purpose of obtaining information or statements required under this law with the intention of evading the payment of tax wholly or partially. When convicted of each of these offences, the person involved shall be liable to imprisonment for a period ranging between one week to one year, or to a fine of not less than 100 Dinars and not more than 500 Dinars. He shall also, in any case, be liable to pay double the amount which he attempted to evade.

Article (43)

Every person who commits any of the following acts is considered to be guilty and when convicted shall be penalized by a fine not less than 5 Dinars and not exceeding 50 Dinars: -

A)Fails to comply with the provisions of any notice or request issued to him under this law or .

B)Fails to appear in answer to a notice issued to him in pursuance of any of the purposes of this law or .

C)Appears but fails to answer any question lawfully put to him in pursuance of the purposes of this law or

D)Fails to submit the Return prescribed in Para (A) Art. (26) & (27) of this law.

Article (44)

Any person who commits any offence in violation of the provisions of this law or any of the regulations enacted thereunder, or fails to comply with any of the provisions of such regulations shall, if no special penalty has been provided for such violation or default, be liable upon conviction to a fine of not less than 25 Dinars or to imprisonment for a period not exceeding one month.

Article (45)

The Director may effect a settlement of any act committed in violation of the provisions of Articles ( 42, 43, 44 ) of this law against payment of a fine to be determined by him. He may, before the final judgment, stop any proceedings taken thereunder and make a settlement regarding such violation.

Article (46)

Proceedings taken in relation to penalty, fine or imprisonment under this law shall not drop any person's liability to pay the tax.

Article (47)

If any of the above acts is considered as an offence penalised more severely under the provisions of any other laws, the provisions of the said law shall be applicable to this offence.

Management

Article (48)

1.      The Department of Income Tax shall be responsible for the enforcement of this law and shall be attached to the Minister of Finance and shall have a Director General and the necessary assistants, assessing officers and employees.

2.      The Director may:-

1.      Exercise all the powers vested in the assessing officer under this law .

2- Form one or more committees of assessing officers to consider cases of taxpayers and to give judgment in such cases at any stage in the assessment proceedings if he deems it necessary in the interest of business. The decision of the committee shall be unanimous or by majority, and in case the committee consisted of two members who had divergent opinions, the Director shall appoint a third member. The decision issued by such committee shall be considered a decision issued by the assessing officer under the provisions of this law.

3- Assessment decisions issued by assessing officers or assessing committees, wholly or partially, including the decision of the assessing officer in accepting the annual statement, shall be subject to prior instructions to be audited by him either directly or by any person appointed by him from the Income Tax Department staff. Assessment decisions which are subject to such audit and scrutiny shall not be legal and binding unless they are thus confirmed and any service of notice of assessment prior to such confirmation shall be null and void and the Director shall give judgment in any matter arising therefrom.

4- Prescribe forms for statements, notices and memos or any forms which he may deem necessary for the implementation of the provisions of this law or any regulations enacted thereunder. He may also amend or cancel any forms which were used previously.

C)The Director General may, upon the approval of the Minister, authorize in writing any first class income tax department official to exercise the powers vested in the Director under the provisions of this law, and in accordance with such conditions and restrictions as he may prescribe.

D)The Director is to issue the instructions prescribed under this law after obtaining the approval of the Minister thereon.

Article (49)

A) Everperson required to carry out any official duties to implement the provisions of this law shall : -

1-Consider all documents, information, statements, assessments, decisions and copies which he has access to and which relate to the income or details relating to the income of any person, as strictly private and confidential and deal with them on that basis.

2- Submit and sign a declaration, the text of which shall be determined by the Minister, to maintain secrecy of official documents.

3- Submit within 2 months of the implementation of this law, or from the date of his appointment, a statement on his movable and immovable properties together with his sources of income and his wife's and minor children's funds. he should also at the beginning of every subsequent year point to any increase in the said properties and funds.

B)The person appointed under this law or who is required to enforce its provisions shall not be entitled to produce, in any court other than the Income Tax Court of Appeal, any documents or statements or assessment, decisions or copies thereof nor to divulge to any court or give it any information or amator thing which may have cometo his knowledge in the course of performing his duties under this law except as may be decided by the Director under this Para to be necessary in each case arising from the enforcement of the provisions of this law or for the prosecution of any offence relating to income tax in the course of investigation of such an offence.

C)Any person having possession of, or control over any documents, information, statements or assessments decisions or copies thereof relating to the income or particulars of income of any person or who at any time discloses or attempt to disclose such information or anything contained in such documents, information or assessment decisions or copies thereof to any person:-

1- Other than the person to whom he is authorized by law to disclose it.

2- For any purpose other than those provided for in this law. He shall be considered to have committed an offence under this law and shall be liable upon conviction to a fine not exceeding 200 Dinars or to imprisonment for a period not exceeding one year or to both penalties.

Article (50)

A) The Council of Ministers may issue regulations necessary for the enforcement of the provisions of this law including:-

1- Regulating the procedures for appeal and cassation of income tax cases which are submitted under this law and incorporate therein provisions regarding the payment of fees, and other necessary provisions.

2- Deduction and payment of tax from salaries and any other income entitled to a deduction under this law.

B)The Council of Ministers may issue instructions and regulations relating to payment of compensations to employees of the Income Tax Department and others and the determination of conditions for such compensation together with bonuses for the purposes of satisfactory execution and fair imposition of tax. Amounts that should be expended for these purposes and for improvement of work and performance in the department and for the development of its system are to be allocated annually in the State budget.

C)Until the regulations provided for in Para A of this article are issued, the regulation issued in accordance with the Income Tax law No. 25 for, 1964 shall remain in force to the extent that they do not conflict with the provisions of this law.

Article (51)

The Council of Ministers is to form a higher committee headed by the Minister of Finance whose duty is to issue recommendations relating to any instructions that may be issued under this law and to offer advice necessary for the implementation of the provisions of this law.

Date of coming into effect of this Law and Repeal

of Law No. 25 of 1964

Article (52)

A) Income tax shall be imposed and collected for each year of assessment before 1982 before 1982 under the provisions of Income Tax Law No. 25 of 1964 and amendments thereto.

B)Income tax shall be imposed on incomes earned in the years 1982 . 1983 and 1984 and collected under the provisions of the Provisional Law No. 34 of 1982.

C)Income tax shall be imposed and collected on income earned in 1985 onwards in accordance with this law.

Article (53)

Income Tax Law No. 25 of 1964 and all amendments thereto shall be canceled .

Article (54)

The Prime Minister and Ministers shall be responsible for the enforcement of this law.