How to Withhold Tax on Fees Paid to Foreign Marketplaces Like Amazon and Noon
Applying Jordanian withholding tax when paying commissions or fees to foreign marketplace operators.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Payable (Marketplace) | Liability (-) | 2,000.00 | - |
| Withholding Tax Payable (ISTD) | Liability (+) | - | 100.00 |
| Cash / Bank | Asset (-) | - | 1,900.00 |
💡 Accountant's Note
Payments to foreign entities for services (commissions, platform fees) may require withholding tax deduction. Jordan has tax treaties with several countries that reduce or eliminate this obligation.
Practitioner & Systems Framework
💻 ERP Architecture
Configure withholding tax codes for payments to foreign service providers in the ERP. The WHT rate depends on: (1) Whether Jordan has a double tax treaty with the recipient's country, (2) The nature of the service (royalties, technical services, management fees each have different treaty rates), (3) Whether the foreign entity provides a tax residency certificate to claim treaty relief. Without a treaty or certificate, Jordan's domestic WHT rate (10% for service payments) applies.
⚠️ Audit Flags
WHT non-compliance is a common finding in ISTD audits of e-commerce businesses: (1) All material payments to foreign platforms (Amazon, Google, Meta, Shopify) should be assessed for WHT applicability, (2) WHT must be remitted to ISTD within 30 days of the payment, (3) WHT certificates must be issued to the foreign payee, (4) Treaty claims must be supported by valid tax residency certificates from the foreign entity.
📄 Required Documentation
Foreign supplier invoice, WHT calculation (payment amount × applicable rate), WHT withholding certificate issued to foreign payee, ISTD WHT remittance confirmation, double tax treaty reference (if rate reduced), and tax residency certificate from foreign entity (if treaty relief claimed).
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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.