Tag: Substance over form
The tax doctrine of “substance over form” is a judicial creation applied in many countries. It is often used by the courts in cases where a taxpayer has constructed a scheme of transactional relationships in documents only or primarily to obtain tax benefits. If the tax motivation outweigh the business purpose and/or profit objective of the transaction, courts will decide that “form” (written contracts and arrangements) does not reflect the “substance” (the real deal) and on that basis denie the intented tax benefits.
See also delineation, labelling and business reasons/purpose.