Withholding Tax on Building Rent (Jordan)
Deducting 5% WHT when paying rent for leased campus space to an individual landlord.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Rent Expense (Leased Campus Space) | Expense (+) | 5,000.00 | - |
| Withholding Tax Payable (ISTD) | Liability (+) | - | 250.00 |
| Cash / Bank | Asset (-) | - | 4,750.00 |
💡 Accountant's Note
Schools renting space from individual landlords in Jordan must withhold 5% of rent and remit it to the ISTD. The landlord receives the net amount.
Practitioner & Systems Framework
💻 ERP Architecture
The 5% WHT deduction on rent paid to individual landlords is configured in the AP module as a tax withholding code on the landlord vendor record. When the rent invoice is posted and paid, the system automatically calculates the WHT (5% of gross rent), deducts it from the payment, and posts the WHT amount to the WHT payable account. The net payment is made to the landlord. The WHT is remitted to the ISTD by the 20th of the following month. WHT certificates must be issued to landlords annually.
⚠️ Audit Flags
Auditors confirm that WHT is correctly applied to all rent payments to individual (non-corporate) landlords — rent to Jordanian companies may have a different WHT rate or no WHT requirement. Verify timely remittance to the ISTD. Confirm that WHT certificates have been issued to landlords annually as required. Test that the gross rent expense in the GL equals the net payment plus the WHT — no rent expense should be understated by netting the WHT.
📄 Required Documentation
Lease agreement identifying the landlord type, rent invoices, WHT calculation confirmation, ISTD remittance receipts, WHT certificates issued to landlords, and landlord vendor record showing WHT configuration.
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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.