Comparative income tax laws in most states recognize the importance of charity association as a model of charitable and voluntary work and its crucial role in providing essential services and goods to individuals. Such recognition has been manifested in granting these associations a favorable tax treatment regarding their incomes and donations received by the. This paper seeks to explore and examine the extent to which the (JITL) has succeeded in adopting an incentive policy which supports and encourages the charity and voluntary services especially; in light of the current difficult economic social circumstances in Jordan .The paper examines the theoretical foundations which underpin the tax favorable treatment for charity associations. Then, it explores the aspects of such treatment under comparative laws, and aims to evaluate the approach undertaken by the JITL regarding such contentious matter.

Comparative analysis conducted in this paper shows that the JITL adopts similar approach to the one which has been adopted by comparative tax laws. This is evident as the JITL exempts the income of the charity associations from tax provided that such income is spent to achieve the non-profitable objectives and goals of the association. The JITL also provides for a preferential tax treatment for the donations given to the charity association it allows the taxpayers to deduct the value of their donations with a maximum amount of 25% of their taxable income within certain conditions. The analysis also illustrates that the JITL has succeeded, to a certain extent in supporting the work of charity associations in Jordan, and it argues that such success could be improved by adopting the recommendations proposed by this paper.

Key words: Income, Donations, Tax Law, Charity association, Tax Exemption

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