Accounting Presumptions and Fictions in Tax Law

Abstract

This article explores the complexities of accounting presumptions and fiction and their role in tax law. Presumptions are logical processes to infer an unknown fact from a known one. They are categorized as legal, absolute or relative, and judicial presumptions. This article also discusses the importance of the presumption of good faith and the acceptance of provisional truths in tax law. On the other hand, accounting legal fictions create parallel realities that diverge from the real world, adapting according to the needs of tax legislation. Examples include the treatment of taxable income and anti-subcapitalization rules, which seek to avoid tax strategies that affect tax neutrality. This study highlights the need for an in-depth understanding of accounting presumptions and fiction to apply tax law properly.

Keywords: Accounting Tax Presumptions, Legal and Accounting Fictions, Tax Neutrality