Regulatory updates - Jordan

The Director General of the Income and Sales Tax Department, Hossam Abu Ali, called on those obligated to use the national electronic invoicing system to reconcile their situations legally via an electronic link. The reconciliation entails registering and joining the national electronic invoicing system before the end of May. This would allow taxpayers to avoid penalties.

All invoices for the sale of goods or services in Jordan must be issued through JoFotara or via systems directly integrated with the platform. Only invoices generated through JoFotara are considered valid and can be claimed for a tax deduction. 

SCOPE

Transactions: B2G (business-to-government), B2B (business-to-business), and B2C (business-to-consumer).

Documents: Income invoices, sales invoices, special sales invoices, simplified invoices, and credit invoices (for income invoices, sales invoices, and special sales invoices).

TIMELINE 

• 2019: standardization of invoice content and record retention
• 2021: JoFotara (National Electronic Invoicing System) was developed developed
• 2022: A pilot for large taxpayers to adopt voluntarily
• 2023–2024: Phase 1 large taxpayers and pilot groups, based on criteria set by the ISTD 
• April 1, 2025: Phase 2 obligation for most businesses to join the system
• 2026 and beyond: Gradual onboarding of SMEs and remaining sectors

Access the official announcement here.

Back on 2022 the Income and Sales Tax Department (ISTD), in collaboration with the Ministry of Digital Economy and Entrepreneurship (MDEE) initiated a deployment of a national invoicing system.

Established businesses with thresholds Exceeding 75,000 JOD (aprox. 99,000 EUR), which incur B2B, B2C and B2G transactions are in scope for this mandate. The deadline to register to the national invoicing system JoFotara concluded last year, on May 31, 2024.

Recently, a new announcement was done regarding JoFotara requirements. The Ministry of Finance and Sales Tax Department stated that phase two would take place on April 1, 2025.

Although not many details were released, the following information was mentioned:

• Invoices must be issued by the electronic national billing system or a system that has been linked electronically with the electronic national billing system;
• It is mandatory to issue and provide the original tax invoice.

More information about the phase 2 outline is available here (in Arabic).

On 14 February 2024, the Income and Sales Tax Department (ISDT) issued a notice urging company owners, establishments, and individuals in the scope of the national e-invoicing system to register their entities and activities in order to ensure legal compliance.

The ISDT highlighted the benefits of registering in the national electronic invoicing system, such as speeding up tax-related tasks, expediting tax clearance and relieving the burden of traditional bookings and auditing processes.

The announcement also emphasizes the importance of swift registration and alignment with system requirements to avoid legal consequences and potential fines. Interested parties can register through this link.

This development has a significant impact on businesses operating in the country. Pagero is actively analyzing the implications of this announcement and will provide updates to stakeholders in due time. Stay tuned for further information.