WHT on Customer Deposit Interest (Jordan 5%)
Withholding 5% income tax from individual depositors' interest at payment and remitting to ISTD.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accrued Interest Payable (Deposits) | Liability (−) | 1,000.00 | - |
| WHT Payable to ISTD (5%) | Liability (+) | - | 50.00 |
| Cash / Customer Account (Net Interest Paid) | Asset/Liability (−) | - | 950.00 |
💡 Accountant's Note
Jordanian banks must withhold 5% income tax on interest paid to individual depositors and remit it to ISTD. Corporate depositors are subject to different withholding rules. The net interest credit to the customer is after the WHT deduction.
Practitioner & Systems Framework
💻 ERP Architecture
In Oracle FLEXCUBE, WHT deduction on deposit interest is configured in the product definition for retail savings and TD products. The WHT amount is calculated automatically and posted to the WHT payable account at the time of interest credit. Monthly WHT remittance to ISTD is done via a bulk payment.
⚠️ Audit Flags
Auditors verify WHT rates match ISTD-published rates and any applicable double tax treaty rates for non-resident depositors. WHT remittance to ISTD must be made by the 15th of the following month. Failure to withhold or remit exposes the bank to joint liability for the customer's tax.
📄 Required Documentation
ISTD WHT remittance schedule, WHT certificates issued to depositors, reconciliation of WHT payable to depositor list, and ISTD quarterly WHT return.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.