Government lowers tax on e-vehicles by half until end of year

-EV with customs value between JD10, 000, JD25, 000 will see special tax halved from 40% to 20%

-Tax cuts apply to e-vehicles currently stored in bonded warehouses, free zones

-Decision follows two-month review by government

-From  January 1,  2025, rates will return to their original levels

AMMAN — The Cabinet on Saturday announced a temporary reduction in special tax rates for fully electric vehicles.

Under the revised tax structure, e-vehicles with a customs value between JD10, 000 and JD25, 000 will see the special tax halved from 40per cent to 20per cent.

 Under the Cabinet decision, E-vehicles with a customs value exceeding JD25,000 will also benefit from a 50per cent reduction, lowering the tax rate from 55per cent to 27.5per cent.

The tax cuts apply to e-vehicles currently stored in bonded warehouses or free zones in Jordan.

 In addition, individuals who registered their e-vehicles after the implementation of the amended Special Tax Regulation No. 62 of 2024 and before this decision will receive a refund of the difference in taxes paid.

The new rates are effective immediately and will remain in place until 31 December 2024, while the reductions are a one-off measure and will not be renewed, according to the Council of Ministers.

From January 1, 2025, the rates will return to their original levels: 40per cent for vehicles worth between JD10,000 and JD25,000, and 55per cent for vehicles over JD25,000.

Electric cars with a customs value of less than JD10,000 are not affected by the decision and will continue to be taxed at 10per cent, reflecting the government's continued support for middle-income buyers.

The decision follows a two-month review by the government, prompted by complaints from importers and industry stakeholders. 

Several complaints pointed out that vehicles brought into Jordan under the previous tax regime were stranded in free zones due to the higher cost of customs clearance.

The Cabinet's move is aimed at easing these bottlenecks, enabling citizens and businesses to complete clearance procedures and finalise purchases.