Impact of Tax and Economic Laws on Disclosure in Shareholding Companies

This study examined a number of economic laws effective in Palestine, namely Income Tax Law 13 of 1947, Income Tax Law 25 of 1964, Palestinian Income Tax Draft Law, which has passed second reading, Investment Promotion Law 1 of 1998, Company Law 12 of 1964. More specifically, this study sought to shed light on these laws, approved to reinforce disclosure, declaration and publication, and identify their shortcomings. The motivation for this study is to contribute to the provision of legal tests which bind the Palestinian public shareholdings to prepare, and publish reports and financial statements which can be hinged up reliably by all users including the tax authority. To these ends, the researcher in chapter one studied company reports and financial statements in terms of their uses, objectives and nature of information. Further, the researcher dwelt on both financial and accounting disclosure in terms of definition, nature, elements, methods and techniques. The researcher also examined tax in terms of definition types, goals and characteristics. He specially tackled the notion of taxable income, according to theories of source and enrichment and according to income tax laws effective in Palestine and Palestinian income tax draft law which passed its second reading. The researcher also looked at expenses allowed to be deducted from tax in line with tax laws effective in Palestine and the terms in these laws which allow recognition of these expenses. IN chapter two, the researcher examined data which must be disclosed according to several laws including tax information which must be disclosed for income tax purposes according to Income Tax Law 13 of 1947 and Income Tax Law 25 of 1964 and Palestinian Income Tax Draft Law in terms of date and techniques of tax estimation on the basis of these data. Accurate accounts and records must be also be supplied. The researcher looked at missing data in these legislation pertinent to disclosure and publication of data. The researcher also examined Investment Promotion Law and its impact on disclosure instruments. He specifically identified areas of weakness and strength of the law particularly concerning incentives and disclosure mechanisms.In addition, the researcher studied the company law in terms of its effective in Palestine.