NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Tax Shelters or Efficient Tax Planning? A Theory of The Firm Perspective On the Economic Substance Doctrine

T. Christopher Borek, Angelo Frattarelli, Oliver Hart

NBER Working Paper No. 19081
Issued in May 2013
NBER Program(s):   CF   LE   PE

Courts have articulated a number of legal tests to distinguish corporate transactions that have a legitimate business or economic purpose from those carried out largely, if not solely, for favorable tax treatment. We outline an approach to analyzing the economic substance of corporate transactions based on the property rights theory of the firm, and describe its application in two recent tax cases.

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Document Object Identifier (DOI): 10.3386/w19081

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