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Accounting errors,financial information and presumption based taxation: the Portuguese case


  • António Martins

    () (University of Coimbra - School of Economics)

  • Cristina Sá

    () (Polytechnic Institute of Leiria - School of Technology and Management)


The purpose of this paper is to analyse the accounting and legal basis that justify the application of presumptions in the taxation corporate income.The connection between errors on recording transactions by the financial accounting system and the use of presumptions by tax authorities will be highlighted. The paper contributes to the literature by offering a systematic analysis of the criteria used by Portuguese tax courts to decide when accounting data can be disregarded by tax authorities and presumptions can therefore be used as a tax computation tool. Given that the general rule is to base taxable income on accounting records (albeit with adjustments established in Corporate Income Tax Code) presumptions are a striking exception to this well established rule. As such, tax researchers, tax authorities and taxpayers have a significant interest in knowing how do courts validate or deny tax authorities’ approach when using presumptions.

Suggested Citation

  • António Martins & Cristina Sá, 2015. "Accounting errors,financial information and presumption based taxation: the Portuguese case," OBEGEF Working Papers 034, OBEGEF - Observatório de Economia e Gestão de Fraude;OBEGEF Working Papers on Fraud and Corruption.
  • Handle: RePEc:por:obegef:034

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    Accounting errors; taxation and presumptions; financial fraud;

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