Environmentally friendly tax measures in the Portuguese jurisdiction. Enforcement of the polluter pays tax principle
International Journal of Law and Management
ISSN: 1754-243X
Article publication date: 3 August 2023
Issue publication date: 27 October 2023
Abstract
Purpose
This paper aims to understand what green tax measures Portuguese corporate tax law foresees and whether the measures observe the polluter pays tax principle.
Design/methodology/approach
The legal research method is applied to achieve the goals. Specifically, the research analyzes the most relevant corporate tax legislation to identify legal provisions influencing taxpayers’ behavior in sustainability decisions, particularly corporate income tax (CIT) and value-added tax (VAT) laws.
Findings
The results show that the Portuguese Green Taxation Law introduces several environmentally friendly taxation measures by benefiting or increasing the tax burden. The influence on the CIT law results from instruments such as the autonomous taxation of expenses, depreciation, provisions and the local corporate tax. In the VAT, electric tourism vehicles’ VAT deduction is possible. These measures enforce the polluter pays tax principle, increasing the tax burden on less environmentally friendly options and decreasing the tax burden on more green economic choices. These measures directly influence the companies’ choice because of the increase or decrease tax burden according to more or less polluting choices.
Research limitations/implications
This study only studies the Portugal case.
Originality/value
This study highlights the Portuguese experience reconciling taxation and environmental dimensions.
Keywords
Acknowledgements
This work was supported by the UIDB/05105/2020 Program Contract, funded by national funds through the FCT I.P. and N2i – Instituto Politécnico da Maia, Avenida Carlos de Oliveira Campos – Castêlo da Maia / 4475-690 Maia, Portugal.
Citation
Rodrigues Aldeia, S.C. (2023), "Environmentally friendly tax measures in the Portuguese jurisdiction. Enforcement of the polluter pays tax principle", International Journal of Law and Management, Vol. 65 No. 6, pp. 511-522. https://doi.org/10.1108/IJLMA-02-2023-0018
Publisher
:Emerald Publishing Limited
Copyright © 2023, Emerald Publishing Limited