Tax Avoidance Chapter 20

Question 1

Tax avoidance and tax evasion

Answer 1

Avoidance: an attempt to minimize a tax liability using legal means, ie to regulate your affairs in such a way that you pay the minimum tax imposed by the act rather than the maximum
Evasion: the use of illegal means to reduce a tax liability, eg falsification of books, suppression of income and, fraudulent non-disclosure of income, overstatement of deductions