{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2025,8,2]],"date-time":"2025-08-02T17:44:58Z","timestamp":1754156698045,"version":"3.41.2"},"reference-count":39,"publisher":"Emerald","issue":"6","license":[{"start":{"date-parts":[[2017,11,13]],"date-time":"2017-11-13T00:00:00Z","timestamp":1510531200000},"content-version":"tdm","delay-in-days":0,"URL":"https:\/\/www.emerald.com\/insight\/site-policies"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["IJLMA"],"published-print":{"date-parts":[[2017,11,13]]},"abstract":"<jats:sec>\n<jats:title content-type=\"abstract-subheading\">Purpose<\/jats:title>\n<jats:p>In Portugal, between 1989 and 2010, capital gains from corporate shares were exempted, while gains from other instruments, like limited liability companies (LLC) equity stakes, were taxed. Inevitably, this non-neutral tax treatment originated a notorious tax arbitrage, consisting in the transformation of the legal status of a LLC into a corporation, the subsequent share sale and tax exemption. In tax litigation, many arbitration rulings were delivered, with widely divergent decisions. The purpose of this paper, using a blend of the legal research method and case analysis, is to discuss three research questions. Should the general anti-abuse clause (GAAC) be applied to this tax planning operation? Why the divergence in arbitration rulings? Is this anomalous arbitration outcome because of the wording the GAAC and its complexity or, contrarily, does it emerge from the disconnection between the set of rules governing capital gains taxation and the legislative intent that is behind such rules?<\/jats:p>\n<\/jats:sec>\n<jats:sec>\n<jats:title content-type=\"abstract-subheading\">Design\/methodology\/approach<\/jats:title>\n<jats:p>The methodology used in this paper is based on a mix of the legal research method and case analysis. In the case of legal research, a hermeneutic approach \u2013 meaning that documents, texts and their interpretation can produce important fruits to the development of the field \u2013 is a tested and fruitful approach. Besides being a hermeneutic discipline, it is an argumentative one. By exposing arguments that confirm or deny particular solutions, legal research (e.g. in criminal, business or administrative law) can influence better legislative choices by political actors. Advantages of case analysis include lessons learned from observation. The author discusses if the application of the GAAC to an arrangement that originated a tax exemption can be validated by the usual interpretative lines that doctrine sustains should be observed when a GAAC is used to void legal schemes. The pros and cons of tax arbitration are also highlighted.<\/jats:p>\n<\/jats:sec>\n<jats:sec>\n<jats:title content-type=\"abstract-subheading\">Findings<\/jats:title>\n<jats:p>The conclusion of this paper is that the GAAC is not the crux of the problem. Instead, a contradictory or, at least, disconnected relation between the expressed intent of legislators and the wording of capital gains tax clauses is, in our view, the main reason for such divergent arbitration rulings on the same issue.<\/jats:p>\n<\/jats:sec>\n<jats:sec>\n<jats:title content-type=\"abstract-subheading\">Practical implications<\/jats:title>\n<jats:p>The author believes that the paper is a contribution to the literature, given the global use of anti-abuse clauses and the interpretative complexities they originate. Moreover, the analysis in this paper is carried out in a legal setting where a disconnection is detectable between the expressed legislative intent and the legal drafting of personal income tax rules related to the exemption of capital gains. Studying the complexity added by this feature of the Portuguese legislation serves as a reminder of the importance of careful and well-crafted wording to achieve consistent court outcomes.<\/jats:p>\n<\/jats:sec>\n<jats:sec>\n<jats:title content-type=\"abstract-subheading\">Originality\/value<\/jats:title>\n<jats:p>The paper has value to governments, tax authorities and tax managers, given the ever-increasing use of anti-abuse clauses in many countries, and the potential use of arbitration in similar settings.<\/jats:p>\n<\/jats:sec>","DOI":"10.1108\/ijlma-05-2016-0050","type":"journal-article","created":{"date-parts":[[2017,10,24]],"date-time":"2017-10-24T07:11:28Z","timestamp":1508829088000},"page":"804-825","source":"Crossref","is-referenced-by-count":2,"title":["Tax avoidance, anti-abuse clauses and arbitration courts: a note on capital gains\u2019 exemption"],"prefix":"10.1108","volume":"59","author":[{"given":"Ant\u00f3nio","family":"Martins","sequence":"first","affiliation":[]}],"member":"140","reference":[{"issue":"1\/2","key":"key2020120420231509100_ref001","first-page":"391","article-title":"The incentives for tax planning","volume":"53","year":"2011","journal-title":"Journal of Accounting and Economics"},{"volume-title":"Relat\u00f3rio anual","year":"2011","author":"Banco de Portugal","key":"key2020120420231509100_ref002"},{"volume-title":"IRS: Incid\u00eancia Real e Determina\u00e7\u00e3o Dos Rendimentos L\u00edquidos","year":"2007","key":"key2020120420231509100_ref003"},{"volume-title":"Principles of Corporate Finance","year":"2014","key":"key2020120420231509100_ref004"},{"key":"key2020120420231509100_ref005","first-page":"147","article-title":"Tax arbitration courts or tax judicial courts: which to choose and what to consider?","volume-title":"The Legal Regime of Tax Arbitration in Portugal","year":"2015"},{"key":"key2020120420231509100_ref006","first-page":"25","article-title":"Legal research","volume-title":"Advanced Research Methods in the Built Environment","year":"2008"},{"volume-title":"A Cl\u00e1usula Geral anti-Abuso No Direito Tribut\u00e1rio \u2013 Contributos para a Sua Compreens\u00e3o","year":"2004","key":"key2020120420231509100_ref007"},{"issue":"3","key":"key2020120420231509100_ref008","first-page":"179","article-title":"A cl\u00e1usula geral anti abuso no CAAD: a insustentabilidade de uma jurisprud\u00eancia contradit\u00f3ria","volume":"7","year":"2014","journal-title":"Revista De Finan\u00e7as Publicas e Direito Fiscal"},{"volume-title":"Applied Corporate Finance","year":"2011","key":"key2020120420231509100_ref009"},{"issue":"1","key":"key2020120420231509100_ref010","doi-asserted-by":"crossref","first-page":"145","DOI":"10.1016\/j.jfineco.2005.02.002","article-title":"Corporate tax avoidance and high-powered incentives","volume":"79","year":"2006","journal-title":"Journal of Financial Economics"},{"volume-title":"Boletim De Informa\u00e7\u00e3o Estat\u00edstica","year":"2016","author":"Dire\u00e7\u00e3o Geral da Pol\u00edtica da Justi\u00e7a","key":"key2020120420231509100_ref011"},{"volume-title":"Tackling Tax Fraud and Evasion in the EU","year":"2012","author":"European Commission","key":"key2020120420231509100_ref012"},{"issue":"1","key":"key2020120420231509100_ref013","first-page":"78","article-title":"Codification of the economic substance doctrine and the Gregory case","volume":"12","year":"2014","journal-title":"The ATA Journal of Legal Tax Research"},{"issue":"5","key":"key2020120420231509100_ref014","first-page":"1","article-title":"Economic substance doctrine\u2014 six months after codification","volume":"12","year":"2010","journal-title":"Journal of Tax Practice & Procedure"},{"volume-title":"Measuring Tax Gaps 2011","year":"2011","author":"HMRC","key":"key2020120420231509100_ref015"},{"issue":"4","key":"key2020120420231509100_ref016","doi-asserted-by":"crossref","first-page":"804","DOI":"10.1016\/j.jcorpfin.2012.06.005","article-title":"Tax avoidance, tax management and corporate social responsibility","volume":"18","year":"2012","journal-title":"Journal of Corporate Finance"},{"volume-title":"The IFS Green Budget","year":"2016","author":"Institute for Fiscal Studies","key":"key2020120420231509100_ref017"},{"volume-title":"International Taxation","year":"2009","key":"key2020120420231509100_ref018"},{"issue":"2","key":"key2020120420231509100_ref019","first-page":"151","article-title":"Germany\u2019s new GAAR","volume":"49","year":"2008","journal-title":"Tax Notes International"},{"volume-title":"Value Added Tax and Direct Taxation: Similarities and Differences","year":"2009","key":"key2020120420231509100_ref020"},{"key":"key2020120420231509100_ref021","unstructured":"Marques, M. 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