Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

October 8, 2021
2021-6030

Jordan issues transfer pricing instructions

On 16 September 2021, the Hashemite Kingdom of Jordan published Executive Instructions No. (3) of 2021 (the Instructions) in the Official Gazette. The Instructions provide further details on the application of the new transfer pricing (TP) rules that became effective in July 20211 and also prescribe the forms that taxpayers should use for filing the TP Disclosure and the Country-by-Country (CbC) report.

The Instructions do not specify when taxpayers need to start complying with the new rules. It also appears that taxpayers are expected to file a copy of the full CbC report in Jordan, even if the original is filed outside Jordan by an Ultimate Parent Entity or a Surrogate Parent Entity.

In the absence of further guidance from the Income and Sales Tax Department (ISTD), for any reporting period ending after 7 July 2021:

  • Taxpayers engaged in transactions with related parties (including notional transactions between a branch and its head office) with an annual value exceeding JOD500,000 (approximately US$705,000) will need to:
    • Submit a TP Disclosure to the ISTD with the tax return (i.e., within four months from the taxpayer’s year-end).
    • Prepare and submit TP master and local files within 12 months following the end of the tax reporting period.
  • Members of a multinational enterprise (MNE) group with consolidated revenue exceeding JOD600m (approximately US$846m) will need to submit a CbC report to the ISTD within 12 months following the end of the MNE group’s tax period.

Jordan-based entities should start reviewing their TP policies and related-party pricing arrangements so they will be able to meet their compliance requirements on a timely basis.

_________________________________________

For additional information with respect to this Alert, please contact the following:

Ernst & Young Jordan, Amman

Ernst & Young LLP (United States), Middle East Tax Desk, New York

_________________________________________

Endnotes

  1. See EY Global Tax Alert, Jordan implements transfer pricing rules, dated 21 June 2021 for previous coverage.
 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more