Jordan is taking a bold step in digital taxation — by April 2025, all businesses must comply with the JoFotara system. Are you ready for this change?
Jordan is advancing its digital tax transformation by implementing Phase 2 of the JoFotara system, effective April 1, 2025. This phase mandates electronic invoicing for all businesses, ensuring compliance with national tax regulations.
Jordan is making significant strides in its transition to electronic invoicing, driven by the Income and Sales Tax Department (ISTD) and the Ministry of Digital Economy and Entrepreneurship (MDEE). The national JoFotara system is at the core of this transformation, ensuring transparency and efficiency in business transactions. This article provides an in-depth look at the JoFotara system and the requirements for its second phase.
A. Understanding the JoFotara System
1. Purpose and Functionality
a. Purpose: The JoFotara system is designed to enhance tax compliance by enabling real-time invoice tracking, reducing fraud, and streamlining business operations.
b. Functionality: Businesses submit electronic invoices via the JoFotara portal, where they receive a government-issued QR code. This QR code serves as verification, ensuring invoices are correctly reported before payments are processed.
2. Key Features
a. Automated invoice validation to prevent errors,
b. Capability for sellers and buyers to modify e-invoices via credit and debit notes,
c. Advanced data analysis tools to detect inconsistencies,
d. Differentiation between multiple invoice types,
e. Real-time and batch invoice submission options,
f. Consolidated daily invoices for approved sellers,
g. Support for cross-border transactions,
h. Verification of tax-paid invoices and tax refund services for international buyers,
i. Optional tax return generation based on submitted invoice data.
B. Phase 2 Requirements and Legal Framework
1. Implementation Timeline
a. Effective Date: Phase 2 will be implemented on April 1, 2025.
b. Regulatory Update: The legal framework will be enforced through Modified
Billing and Control Regulation №2 of 2025.
2. Compliance Requirements
a. All invoices must be electronically issued through the JoFotara system or an integrated platform.
b. Non-compliant invoices will not be considered valid for tax or financial purposes.
3. Business Obligations and Penalties
a. Companies must register with the JoFotara system by May 2024 to avoid penalties.
b. Only registered businesses will be allowed to engage in transactions with public institutions.
c. Private sector companies are advised to ensure that their partners comply with Jordan’s e-invoicing mandates.
C. Jordan’s Digital Transformation: Opportunities & Challenges
1. Current Landscape
a. Regulatory Background: Jordan mandated invoice issuance for goods sales in July 2019, but a standardized e-invoicing system was lacking.
b. Challenges: The absence of a unified system has created gaps in tax accountability and data consistency.
2. Government Initiatives
a. The ISTD aims to address these challenges by enforcing e-invoicing regulations.
b. MDEE has published Request for Proposal (RFP) documents outlining system specifications, including:
User interface and access options,
Invoice management and validation mechanisms,
Secure data storage and retrieval.
3. System Benefits
a. Fraud Prevention: Ensures transparency and combats tax evasion.
b. Cost Savings: Reduces paper and administrative expenses.
c. Accessibility: Available via web and mobile applications.
d. Ease of Adoption: User-friendly interfaces for businesses of all sizes.
4. Jordan’s Global Position
a. Jordan currently ranks low in the Electronic Government Development Index, indicating room for improvement in digital services.
b. The Jordan Strategy Forum (JSF) recommends enhancing security measures for digital transactions and data exchanges.
D. Conclusion
Jordan’s transition to electronic invoicing marks a major advancement in tax administration and business compliance. The JoFotara system fosters transparency, reduces operational inefficiencies, and aligns Jordan with global digitalization trends. To ensure compliance and avoid penalties, businesses must act swiftly in integrating their invoicing systems with JoFotara.
As a trusted technology provider, Melasoft offers comprehensive e-invoicing solutions tailored to meet Jordan’s regulatory requirements. Our expertise ensures a seamless integration process, allowing businesses to focus on growth while staying compliant. Contact us today to learn more about how Melasoft can facilitate your e-invoicing journey.
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