Tax Evasion. An Overview

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Tax evasion is a misdemeanor offense, punishable under tax laws with a prison sentence of up to 10 years or a fine, depending on jurisdiction.

Essentially, tax avoidance constitutes the exercise of a tax regime to an individual or entity’s dubious advantage, with the intentions of reducing  the sum of tax money due to the authorities, as required by law. The attempt is punishable.

Despite perfect impunity, tax evasion occurs when the offender shows himself before the act is discovered by the authorities. The possibility of amnesty as a way of promoting repentance exists for elementary reasons. A taxpayer should inform financial authorities, especially the tax offices or main customs offices/customs investigation offices, on any major inaccurate or incomplete tax information.

Subjective intention means that an offender committed the offense intentionally. While subjective frivolity points to more than simple negligence, it points to gross negligence.  

The declining tax morality and the occasional perception of tax evasion as a minor offense leads to more instances of evasion. And this is due to many factors which include perceived low probability of detection, low penalty envisaged and the lack of transparency on expenditure which has to be explained.

In particular, the low penalty envisaged in relation to tax offenses is often viewed as key, as a result the perpetrator tends to be spared financially despite the high loss totals.

Tax resistance pertains to the blatant refusal to remit taxes for reasons considered pertinent by the resister, for example he/she may not be supportive of some of the state’s activities. Unlike tax protestors, tax resisters generally do not assume the conviction that tax laws are illegal. Instead, they are keen on avoiding remittances in opposition to certain government policies.

By contrast tax evasion entails exploits by natural or legal persons to evade taxes through illegal methods. And often involves taxpayers intentionally manipulating or covering the actual state of affairs to the tax agencies in order to subvert their tax obligation. And can also occur in the form of unscrupulous tax reporting like declaring lower income, profits or gains than the actual or simply falsifying deductions.

A number of jurisdictions levy taxes on income derived in that currency area in spite of the country of origin of the individual or company involved. Many nations also participate in bilateral double taxation treaties with other countries as a means to prevent double taxation of nonresidents.

That is, once in the host country and again in the country of origin, all the same, there are significantly few double taxation treaties involving jurisdictions viewed as tax havens.


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