Harmful Tax Practices – 2023 Peer Review Reports on the Exchange of Information on Tax Rulings

654. Jordan can legally issue the following one type of rulings within the scope of the transparency framework: (i) preferential regimes.1

655. For Jordan, past rulings are any tax rulings within scope that are issued either (i) on or after 1 January 2015 but before 1 September 2017; and (ii) and on or after 1 January 2012 but before 1 January 2015, provided still in effect as at 1 January 2015. However, as Jordan put in place an administrative process to issue rulings in 2019, there are no past rulings that have been issued by Jordan in the relevant period.

656. For Jordan, future rulings are any tax rulings within scope that are issued on or after 1 September 2017. Jordan only put in place an administrative process to issue rulings in 2019.

657. In the prior years’ peer review report, it was determined that Jordan did not yet have specific mechanisms in place for identifying future rulings and potential exchange jurisdictions within the scope of the transparency framework. It was noted that the Income and Sales Tax Department (ISTD) within the Ministry of Finance was working on introducing a mechanism to identify future rulings that are in the scope of the transparency framework and all jurisdictions for which the tax ruling would be relevant. Jordan indicated that detailed procedures and guidance were expected to be developed in 2023. Therefore, Jordan was recommended to develop an effective information gathering process for identifying all future rulings and all potential exchange jurisdictions.

658. During the year in review, it is not known whether Jordan has put in place this process to identify all future rulings and potential exchange jurisdictions, and therefore the recommendation remains in place.

659. In the prior years’ peer review report, it was determined that Jordan did not yet have a review and supervision mechanism under the transparency framework. It was noted that Jordan is currently considering the implementation of review and supervision mechanisms within ISTD to ensure that all relevant information related to future rulings is captured adequately. Therefore, Jordan was recommended to put in place a review and supervision mechanism as soon as possible.

660. During the year in review, it is not known whether action has been undertaken on this aspect during the year in review and therefore, the recommendation remains in place.

661. Jordan does not have specific mechanisms in place for identifying relevant rulings and potential exchange jurisdictions within the scope of the transparency framework as well as for reviewing and supervising that all relevant information is captured adequately. Jordan is recommended to ensure that it has put in place an effective information gathering process to identify all relevant rulings and potential exchange jurisdictions, with a review and supervision mechanism, as soon as possible (ToR I.A).

662. In the prior years’ peer review reports, it was determined that Jordan did not yet have the necessary domestic legal basis to exchange information spontaneously. Therefore, Jordan was recommended to put in place a domestic legal framework allowing spontaneous exchange of information on the relevant tax rulings and to ensure the timely exchange of information on rulings in the form required by the transparency framework, as soon as possible. Jordan can only exchange information on request.

663. During the year in review, it is not known whether Jordan introduced such a domestic legal framework, and therefore the recommendation remains in place.

664. Jordan has international agreements permitting spontaneous exchange of information, including (i) the Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011[2]) (“the Convention”).

665. In the prior years’ peer review reports, it was determined that Jordan did not yet have a process to exchange information on rulings in accordance with the form and timelines required by the transparency framework. It was noted that Jordan was considering the implementation of a process within ISTD to ensure the timely exchange of information on future rulings. During the year in review, it is not known whether Jordan introduced such a process, and therefore the recommendation remains in place.

Conclusion on section B

666. Jordan does not yet have the necessary domestic legal basis to exchange information spontaneously and a process to exchange information on rulings in the required format and timelines. Jordan is recommended to put in place a domestic legal framework allowing spontaneous exchange of information on the relevant tax rulings and to ensure the timely exchange of information on rulings in the form required by the transparency framework, as soon as possible (ToR II.B).

667. As there was no information on rulings exchanged by Jordan for the year in review, no statistics can be reported.

668. Jordan offers one intellectual property regime (IP regime).2 The assessment of transparency requirements under the Action 5 Report (OECD, 2015[3]), is as follows.

• New entrants benefitting from the grandfathered IP regime: the Development zone regime was reported in the year 2019 as actually harmful. In January 2021, Jordan issued regulation as well as a legally binding opinion and an administrative act, both annexed to the regulation, amending the regime as of 1 January 2021 with no grandfathering provided to existing taxpayers. The FHTP approved these documents and concluded that the regime was compliant with the FHTP standard and therefore updated the conclusion to “not harmful (amended)”. Throughout the period in which the regime is considered “harmful”, Jordan is expected to have information available and to have exchanged information on new entrants as of the relevant date from which the enhanced transparency obligations apply (i.e. 16 October 2017) until the date the regime is amended (i.e. 1 January 2021). In the prior year’s peer review report it was noted that Jordan had not identified information on new entrants to the Development zone regime for the relevant period indicated above, and as such had not exchanged information on these taxpayers. Jordan had indicated that a process to identify new entrants to the Development zone regime for the relevant period would be developed in 2023. Therefore, Jordan was recommended to identify information and to put in place a domestic legal framework allowing spontaneous exchange of information on all new entrants to the IP regime, as soon as possible (ToR I.A.1.3). As it is not known whether action has been undertaken on this aspect during the year in review, the recommendation remains in place.

• Third category of IP assets: not applicable to this regime.

• Taxpayers making the use of the option to treat the nexus ratio as a rebuttable presumption: not applicable to this regime.

[1] OECD (2021), BEPS Action 5 on Harmful Tax Practices - Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD Publishing, Paris, http://www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparency-framework.pdf.

[3] OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264241190-en.

[2] OECD/Council of Europe (2011), The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, OECD Publishing, Paris, https://doi.org/10.1787/9789264115606-en.