How to Withhold and Record the 5% Rent Tax When Paying an Individual Landlord in Jordan
Deducting 5% withholding tax from rent paid to an individual (non-corporate) landlord and remitting to ISTD.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Rent Expense (Store) | Expense (+) | 2,500.00 | - |
| Withholding Tax Payable (ISTD) | Liability (+) | - | 125.00 |
| Cash / Bank | Asset (-) | - | 2,375.00 |
💡 Accountant's Note
Jordanian law requires a company to deduct 5% from rent paid to an individual landlord and remit it to the ISTD on their behalf.
Practitioner & Systems Framework
💻 ERP Architecture
Set up the WHT calculation automatically in the AP module when the landlord is flagged as an individual. Issue a withholding certificate to the landlord each month. Remit to ISTD by the 10th of the following month using Form 103. If the landlord is a company (has a TIN), no WHT is required — verify landlord status before applying.
⚠️ Audit Flags
Failure to withhold rent tax from individual landlords is a top ISTD enforcement area. The full WHT liability (not just penalties) falls on the tenant who failed to withhold. Auditors check the landlord's status for every rental agreement — a lease with an individual that shows no WHT deduction is an immediate finding. Issue annual WHT certificates to landlords to document compliance.
📄 Required Documentation
Lease agreement with landlord identification (individual vs. company), landlord National ID or TIN, monthly WHT deduction records, ISTD remittance receipts (Form 103), annual WHT certificate issued to landlord, and landlord bank account records confirming net payment.
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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.