Income and Sales Tax: The Invoicing System Is Not Intended to Impose Taxes (2024)

Director General of the Income and Sales Tax Department, Hussam Abu Ali, said that the electronic national invoicing system is a national reform that does not aim to impose taxes or increase taxes. It is a regulatory system that came for the purposes of transferring invoice data and documenting it electronically. Care was taken to make it easy and simple for everyone who uses it and does not incur any costs or expenses. It imposes financial burdens on those who use it, and its use does not require any experience.

During his meeting with the Chairman and members of the Board of Directors of the Irbid Chamber of Commerce, he added that the Income and Sales Tax Department launched the Jordanian the electronic national invoicing system in 2022 to enable companies, establishments, professionals, craftsmen, and obligated individuals to join the electronic national invoicing system.

He stated that the electronic national invoicing system is capable of accommodating the issuance of 60 million invoices daily, indicating that the system applies various aspects of security and information protection applied in global systems and was applied experimentally to a number of establishments, companies and taxpayers before its official launch.

According to Abu Ali, it was taken into account that the electronic national invoicing system should be easy and simple for all those who are obligated and everyone who uses it, and that it should be able to accommodate all the accounting systems used in all different sectors and that it should be able to adapt to deal with these systems without arranging any amendments or changes.

Abu Ali stated that the system was issued based on the provisions of Income Tax Law No. 38 of 2018, in accordance with the provisions of Paragraph (F) of Article (23), which required that the person be obligated to issue an original invoice to provide any service in exchange for the exchange or sell any commodity in the Kingdom, and to regulate all Affairs related to invoicing systems, their issuance and oversight, and the categories excluded from them in accordance with this system, and based on the provisions of Article (16) of the System for Regulating and Oversight of invoicing Affairs No. (34) of 2019, Executive Instructions for invoicing Affairs and its Control No. (1) of 2019 were issued.

Abu Ali said that an electronic invoicing platform has been found on the department’s website, through which it allows taxpayers to issue invoices if they do not have an invoicing system or direct link with the tax.

The Director General of the Income and Sales Tax Department stated that under the amended system for organizing and controlling invoicing affairs No. (13) of 2023, those bound by the system, including companies, establishments, professionals, service providers, craftsmen and individuals who apply the electronic national invoicing system, are obligated to issue the invoice electronically through the invoicing system and are not obligated to keep hard copies of these invoices.

Abu Ali added that the procedures for registering with the electronic national invoicing system are simple and easy, and will play a role in making it easier for taxpayers. It will work to reduce human intervention, facilitate the procedures for auditing taxpayer files, and accelerate their obtaining a tax clearance. It will also contribute to eliminating the burden of transferring invoices books and financial statements from Companies to tax auditor offices.

During the meeting, Abu Ali stated that more than one international institution raised Jordan's rating according to international standards and praised the structural reform policies that protected Jordan from the repercussions of regional crises.

Abu Ali indicated that specialized work teams have been allocated to assist the obligated categories included in the invoicing system, with the aim of meeting them, guiding them, educating them, assisting them technically and technically, and facilitating for them the procedures for connecting to the system and using one of the platforms that suits each taxpayer.

The Director General of the Income and Sales Tax Department announced that any obligated taxpayer to register in the electronic national invoicing system who will register in the system before the end of the current month will have his fines incurred as a result of not joining and registering in the national electronic invoicing system cancelled.

He stated that all taxpayers can communicate with the taxpayers’ services center in the department by phone or the WhatsApp application on the phone number 062222130 or through various social networking sites for guidance, receiving the required assistance, answering their inquiries and comments, as well as helping them to conduct their transaction procedures electronically and responding to them in the shortest possible time.

For his part, the head of the Irbid Chamber of Commerce, Mr. Muhammad Al-Shouha, said that the meeting was held at the request of members of the Irbid Chamber of Commerce and members of the General Authority regarding the national invoicing system, to gain more information about the system and to clarify more points for many merchants.

Income and Sales Tax: The Invoicing System Is Not Intended to Impose Taxes (2024)

FAQs

Is sales tax imposed on buyer or seller? ›

The seller is responsible for paying sales tax to the CDTFA on their taxable transactions. A seller is generally allowed to collect the sales tax from you—the customer; however, the seller owes the tax even if they do not collect it from the customer.

Why is the sales tax sometimes used as an example of a regressive tax? ›

Explain to students that sales taxes are considered regressive because they take a larger percentage of income from low-income taxpayers than from high-income taxpayers.

Is the sales tax a regressive tax True or false? ›

A regressive tax is often flat in nature, meaning that the same rate of tax applies (generally) regardless of income. These taxes include most sales taxes, payroll taxes, excise taxes, and property taxes.

When creating an invoice using automated sales tax What is the importance? ›

Expert-Verified Answer

The header's location of sale field in an invoice created using automated sales tax is important because it determines the appropriate tax rate and tax jurisdiction for the transaction.

What happens when a tax is imposed on sellers? ›

Imposing a tax on the supplier or the buyer has the same effect on prices and quantity. The effect of the tax on the supply-demand equilibrium is to shift the quantity toward a point where the before-tax demand minus the before-tax supply is the amount of the tax.

Who pays the tax, buyers or sellers? ›

The tax incidence depends on the relative price elasticity of supply and demand. When supply is more elastic than demand, buyers bear most of the tax burden. When demand is more elastic than supply, producers bear most of the cost of the tax. Tax revenue is larger the more inelastic the demand and supply are.

Is income tax a regressive tax? ›

Income taxes and estate taxes are among the most common types of progressive (non-regressive) types of taxes. Both have higher rates and higher tax liabilities for those with higher income.

Why is it argued that a sales tax is regressive? ›

In contrast to the personal income tax, the sales and use tax is regressive. This is because people with lower incomes need to spend larger shares of their income to cover basic needs, so sales taxes take up larger shares of low-income households' budgets.

Who bears the burden of sales tax? ›

Sales tax is imposed upon the retailer (seller) on the sale of tangible personal property at retail in California.

What type of tax is the US income tax? ›

Federal income taxes are considered a marginal tax or progressive tax and apply to all forms of earnings that make up a taxpayer's taxable income, including wages, salaries, commissions, bonuses, tips, investment income, and certain types of unearned income.

Which person pays a larger percentage of income with a sales tax? ›

Sales tax is regressive, in fact. Why? Because people who earn less pay a larger percentage of their salary in the form of sales tax, as compared to those who earn more.

Who pays the most on progressive taxes? ›

Those who earn less are taxed at a lesser rate. Those who earn more are taxed at a higher rate. This concept is known as ability-to-pay taxation. The top earners are taxed more and on larger sums of money so a progressive tax increases the amount of tax revenue coming in.

What is the purpose of using a sales order instead of an invoice? ›

Purpose. A sales order is an internal document commonly used by sellers to track their orders. This way, they can resupply their stock in time and better regulate their inventory. An invoice is an external document representing valid proof of business expenses for the buyer.

What are the 2 main purposes of creating an invoice? ›

An invoice is a document used to notify a customer that payment is due. It also serves as a record for the issuing business so that it can track its receivables. In the past, invoices were only issued on paper due to the limitations of technology.

Should I invoice with tax? ›

The general rule of thumb is that: If the invoice is for the sale of a product, you likely will need to apply sales tax. If the invoice is for the sale of a service, you likely won't need to apply sales tax.

Is sales tax added to the selling price? ›

Sales tax refers to when it's added to the sales price of a good or service and is then charged by the retailer to the end consumer. The retailer then remits the retail sale's collected tax to the government. Tax jurisdictions only receive tax revenue when a sale is made to the end consumer.

When a tax is placed on the buyers of a product? ›

Question: When a tax is Placed on the buyers of a product, the effective price received by sellers decreases, and the price paid by buyers increases, demand for the product decreases, size of the market decreases.

What is a tax on buyers called? ›

Sales Tax is defined as a tax on the sale, transfer, or exchange of a taxable item or service. Sales tax generally applies on the sale to the end user or ultimate consumer. Sales tax is generally added to the sales price and is charged to the purchaser.

Are sales taxes an expense of the seller? ›

The sales taxes collected by a merchant are not part of the merchant's sales and are not part of the merchant's expenses. Instead, the merchant is merely an agent of the state and will record the sales taxes collected in a current liability account such as Sales Taxes Payable.

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