Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

The "True and Fair View" Concept in Business and Tax Law: The Portuguese and Spanish Case Studies

Author(s): Susana Aldeia

The main goal of this paper is to understand how the “true and fair view” concept was incorporated in the Spanish and Portuguese national laws, comparing the national legal dispositions and understanding how this concept was accepted in each of these countries. For this purpose, the business and tax law of both European countries were investigated. In Spain, the Commerce Code (Código de Comercio), the Capital Companies Law (Ley de Sociedades de Capital), the Accounting law (Plan General de Contabilidad) and the Corporate Income Tax Law (Ley del Impuesto sobre Sociedades) were studied. In Portugal was made an analysis of the Code of Commercial Companies (Código das Sociedades Comerciais), the Securities Code (Código dos Valores Mobiliários), the Accounting law (Plano Oficial de Contabilidade and Sistema de Normalização contabilística) and the Corporate Income Tax Law (Código do Imposto sobre o Rendimento das Pessoas Coletivas). The results show that the true and fair view concept was incorporated by both national laws, mainly because as member states of the European Union they were obliged to integrate it. This integration occurred in both business and tax law. The business legislation has a general understanding of the concept as an overriding principle, being the accounting principles simple means to reach it. In the corporation income tax law, this concept is implicitly recognized in both laws by inherent acceptance of generally accepted accounting principles under Articles 10.3 of the Ley del Impuesto sobre Sociedades and 17.3 of the Código do Imposto sobre o Rendimento das Pessoas Colectivas.

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