What Is Tax Avoidance?

The interpretation of tax avoidance by the United Nations tax experts group is that tax avoidance is a relatively vague concept, and it is difficult to define it in the commonly accepted wording.

Generally speaking, tax avoidance can be regarded as a way for taxpayers to arrange their affairs by using some kind of loopholes or ambiguities in law, so as to reduce the amount of tax he should bear.

Although tax avoidance may be considered immoral, the way of tax avoidance is legal and not fraudulent.

Tax avoidance is an indication of the imperfections and defects of the existing tax laws. It shows the unsound features of the existing tax laws.

The tax authorities often need to take corresponding measures to correct and correct the existing tax laws according to the defects of tax laws shown in tax avoidance.

Therefore, through the study of tax avoidance, we can further improve the national tax system and contribute to the progress and development of the society and economy.

Some researchers believe that tax avoidance actually exists in three cases, that is, legal; not illegal; and the legal nature of the surface is illegal.

Legal avoidance of tax is also known as tax saving, which means taxpayers are guided by the government's tax policy and optimize the tax plan through the arrangement of business structure and paction activities, so as to lighten the tax burden and obtain legitimate tax benefits.

This should not be opposed to taxation and can only be protected.

This kind of tax avoidance is often caused by loopholes in the tax law, so that taxpayers can make use of the imperfections of the tax law to make arrangements that are conducive to lightening the tax burden.

Such tax avoidance will result in the loss of state revenue. However, since the law does not exist, the tax bureau can not give legal sanction like tax evasion.

Only by improving the tax law can we eliminate loopholes.

Surface legality is illegal and tax avoidance. It is an illegal act of Tax Evasion under the cover of legal cloak.

This is quite common in international taxation.

In general, we also make use of the differential provisions and preferential policies of the tax law.

Only by strengthening the inspection of such tax avoidance behavior, should we find out the truth, we should be punished according to tax evasion.