Tax

Question 1

What is tax evasion:

Answer 1

This is illegal. This when you are deliberately concealing income or misrepresenting income in order to reduce you tax bill.

Examples:
- omitting income from tax return
- not submitting a return
- if you hide funds in tax havens
- having complex links between types of legal entity

Question 2

What is tax avoidance:

Answer 2

This is sort of legal.
It’s trying to reduce your tax bill within the letter of the law.
Once the loophole has been found, it usually gets closed and then is becomes illegal.

Question 3

What is tax planning?

Answer 3

It’s trying to reduce your tax bill by using the rules and regulations created by the government for this purpose.