The Current Situation:
1.The Jordanian government has taken a set of measures based on many penal and tax legislation in order to implement the obligation to review the penalties against elements of enabling tax evasion, including companies that do not prevent their employees from facilitating tax evasion.
2.The Income Tax Law No. 34 of 2014, according to the amended Law No. 38 of 2018 , has been amended as follows:
-Tax evasion has been identified.
-Article 66 of the same law concerned in penalties has been amended to include employees in the private and public sector and include more accurate sanctions.
3.The Law on Regulating and Monitoring Billing Affairs No. 34 of 2019 was issued in accordance with Article 23 / F of the Income Tax Law and its amendments No. 34 of 2014, where many measures aimed at preventing tax evasion were issued and in accordance with that system, the instructions for billing affairs and control were issued as in the amendments No. 1 of 2019.
4.Article 20/D of the law stipulates, “For the purposes of the current transactions between the parties concerned, the department of income tax shall verify whether any condition or provision is contained within any transaction, agreement or arrangement different from the terms and conditions that could have been agreed upon. As if the parties of the transaction were independent, and the income and tax of the relevant persons are adjusted to reflect any difference in the price from what has been collected between the concerned parties and what is collected between the independent parties and any additional tax in accordance with international standards.
5.In spite of what is stated in Paragraph D of this article, Fake transactions are ignored and are those that were not conducted for business activities, but were carried out for the purpose of reducing the tax due or transferring the tax burden in a manner that violates the provisions of this law or agreements to avoid double taxation and prevent evasion of international taxes or agreements, and the tax is estimated as if it was not that transaction.
6.Article 61 / G of the law stipulates that “despite what is mentioned in this law or any other legislation, the Public Tax Prosecutor by a decision of the director may request from any party any information necessary to implement the provisions of this law, if he has evidence of the existence of tax evasion.
7.In accordance with Law No. 38 of 2018 amending the Income Tax Law of 2014, the Public Prosecution Tax Office is affiliated to the Judicial Council and not to the administrative apparatus of the Income Tax Department.
8.The Companies Law No. 22 of 1997 as amended and its Chapter 7 clarify provisions for auditors, regarding their election t their duties and many other issues – including those related to preparing the general budget of the company and upon which the tax will be calculated, as well as their criminal, civil and disciplinary responsibilities in case they violate their duties and legal status.
9.Codes of conduct have been adopted in partnership with the private sector to enhance integrity and combat tax evasion.
10.Developing control procedures for private sector companies by adopting guidance and reference rules that include financial and administrative control mechanisms and standards.
The most important legislations related to companies, which include some provisions related to control mechanisms:
1.Securities Law No. 18 of 2017;
2.Companies Law and its Amendments No. 77 of 2008;
3.Venture Capital Companies Law No. 143 of 2018.
4.Regulations of Non-profit Companies and its amendments No. 17 of 2010;
5.Companies Liquidation Act No. 122 of 2017.
11..The Integrity and Anti-Corruption Commission prepared a Code of Conduct in the private sector in cooperation with the American Chamber of Commerce in Jordan to enhance the Chamber’s program to fight corruption and enhance integrity, as well as after establishing the opinion of the Central Bank of Jordan, the Securities Commission and the Companies Control Department.