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An Accounting and Financial Note about the Economic Substance Test

An Accounting and Financial Note about the Economic Substance Test ec Forum TAX An Accounting and Financial Note about the Economic REVIEW Substance Test 2020–5 ** António Martins Keywords: abusive tax planning, anti abuse rule, economic substance, accounting and financial statements A general approach mentioning costs, investments and 1INTRODUCTION other economic variables is offered by the Court. Our Many countries have inserted general anti-abuse rules aim is to provide some financial and accounting based (GAAR) into their tax systems. Portugal introduced a comments to this view. Our purpose is to strengthen the GAAR in 2000. Empirical evidence shows a restrained conceptual approach, by going into the accounting and application of this clause in fighting abusive tax planning. finance specifics of transactions to supply additional After enacting a new GAAR by adapting the dispositions of clues to the legal analysis of the economic substance test. the European Union Anti-Avoidance Directive (ATAD) an An economic perspective of the concept can follow, increase in auditing of supposedly abusive operations may among others, two additional lines of enquiry. Firstly, a follow. In this setting, the concept of economic substance is rule based economic approach searching for a definition of paramount importance. of ‘economic substance’ would sustain that an operation However, a core issue http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png EC Tax Review Kluwer Law International

An Accounting and Financial Note about the Economic Substance Test

EC Tax Review , Volume 29 (5): 7 – Oct 1, 2020

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Publisher
Kluwer Law International
Copyright
Copyright © 2020 Kluwer Law International BV, The Netherlands
ISSN
0928-2750
Publisher site
See Article on Publisher Site

Abstract

ec Forum TAX An Accounting and Financial Note about the Economic REVIEW Substance Test 2020–5 ** António Martins Keywords: abusive tax planning, anti abuse rule, economic substance, accounting and financial statements A general approach mentioning costs, investments and 1INTRODUCTION other economic variables is offered by the Court. Our Many countries have inserted general anti-abuse rules aim is to provide some financial and accounting based (GAAR) into their tax systems. Portugal introduced a comments to this view. Our purpose is to strengthen the GAAR in 2000. Empirical evidence shows a restrained conceptual approach, by going into the accounting and application of this clause in fighting abusive tax planning. finance specifics of transactions to supply additional After enacting a new GAAR by adapting the dispositions of clues to the legal analysis of the economic substance test. the European Union Anti-Avoidance Directive (ATAD) an An economic perspective of the concept can follow, increase in auditing of supposedly abusive operations may among others, two additional lines of enquiry. Firstly, a follow. In this setting, the concept of economic substance is rule based economic approach searching for a definition of paramount importance. of ‘economic substance’ would sustain that an operation However, a core issue

Journal

EC Tax ReviewKluwer Law International

Published: Oct 1, 2020

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