Jordan – provision for doubtful debts, accelerated tax depreciation

Jordan – provision for doubtful debts

KPMG in Jordan summarizes key changes in a new tax regulation that allow deductions related to double debts, permit accelerated depreciation for certain categories of assets. These measures are in effect as of 1 January 2015.


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Provision for doubtful debts

Under the new regulation, a provision for doubtful debt expense will be accepted for corporate income tax purposes for entities other than banks and insurance companies where certain conditions are met. Among others, these conditions are as follows:

  • The taxpayer’s accounting records and financial statements must be prepared using International Accounting Standards and audited by a Certified Public Accountant (CPA).
  • Claims for doubtful debts cannot relate to pre-2015 receivables.
  • The taxpayer must prepare a CPA-certified customer receivable aging schedule that includes: 
    • the customer’s name and address
    • original debt amount
    • start date of the receivable’s outstanding balance
    • due date
    • last collection date
    • a summary of the process undertaken to collect the outstanding amount. 

  • The amount deduct should not exceed 5 percent of the accounts receivable outstanding balance that has been outstanding for 1 – 2 years, or 10 percent of the amount outstanding for outstanding for 2 – 3 years. No provision is allowed for balances outstanding for 3 or more years. 
  • In all cases, the provision for doubtful debt expense amount should not exceed 1 percent of the taxpayer’s accounts receivable outstanding balances at year-end, (provided that these balances related only to the taxpayer’s taxable operations).

Accelerated depreciation

The new regulation entitles taxpayers to adopt an accelerated depreciation method by increasing the depreciation rates set out in the regulation, provided the adopted depreciation rates do not exceed 3 times the rates in the regulation. Once a taxpayer adopts accelerated rates, they cannot be changed.

It is not allowed to adopt such accelerated depreciation method for machines and machinery and other capital assets entering Jordan temporarily.

Some of the new depreciation rates are as follows:

Type of asset New depreciation rate
Furniture and furnishings used in hospitals, hotels and inns, cafes, restaurants, cinemas and places of entertainment and rest houses, swimming pools 15%
Transportation 15%
Computers, related hardware and medical equipment

Computer programs 50%
Key money 25%
Other intangible assets, including purchased goodwill, patent, trademark, design, composition of the mixture, confidential process and the right of publication, copyright and the right of the concession, the use of or the right to use the industrial equipment, commercial or scientific experience and related information 10%


Income Tax Regulation No 55 for 2015, issued pursuant to Income Tax Law No 34 2014, which entered into force on 1 January 2015.

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