Taxation is everywhere in our daily life. People cannot always evade taxes. For instance, we pay tax when we buy goods therefore it is impossible to escape this kind of included tax.
Tax avoidance and tax evasion are determinant for tax burden because they are one of the factors that fix the burden for taxpayer.
Individuals who work have to declare their income. Hereby they are confronted with their future taxes they have to pay. Tax avoidance and tax evasion are different by their legality. Taxpayers are free to be honest in their tax return and contribute to the revenue of the Government. That is why it is interesting to define tax evasion and tax avoidance in the first part. It will lead the essay to the analysis how an individual decides to avoid income or to reduce taxes. The last part will shed some light on the instruments used by the Government to combat that.
[...] By tax avoidance OECD means unacceptable tax planning. What is critical is transparency.” Donald Jonhston, Scretary-General of the OCED. Bibliography 1. Cullis, J., Jones, P., Public Finance and Public Choice, (New York, 1998) 2. Fortin, B., Lacroix G., Villeval, M.-C., Tax Evasion and Social Intereaction, (Montréal, December 2004) 3. Kirkpatrick, J., Le régime fiscal des sociétés en Belgique, (Bruxelles, 1995) 4. Migaud, D., De nouvelles measures de modernisation des dispositifs fiscaux de lutte contre la fraude et l'évasion fiscales: le maintien d'une nécessaire vigilance, (paper from the Financial Commission, 2005) 5. [...]
[...] The idea is to implant societies in the countries where there is less tax compared to the original country, verily no tax. Monaco is one of a heaven”. This behaviour is lawful if the individual spends his private and professional life in the heaven” most of his time. Then he can avoid taxes in his own country. If the individual is enough wealthy, he can pay professional in order to decrease tax. These tax dodgers do not evade tax. 4. [...]
[...] The difference between tax avoidance and tax evasion and the different instruments government might use to combat these 1. INTRODUCTION 2. TAX EVASION 3. TAX AVOIDANCE 4. DECISION TO AVOID INCOME 5. INSTRUMENTS USED BY THE GOVERNMENT TO COMBAT TAX EVASION AND TAX AVOIDANCE 6. CONCLUSION 1. Introduction Taxation is everywhere in our daily life. People cannot always evade taxes. For instance, we pay tax when we buy goods therefore it is impossible to escape this kind of ‘included tax”. [...]
[...] Because individuals who receive an important amount of cash might hide one of this part. By reducing the payment by cash, it would decrease the number of dishonest people. A fine should be given if there is no bill when we buy a product. The fiscal control has to be strengthened by cancelling all exemptions, by accelerating the conviction of grave infractions. Moreover the illicit labour has to be looked after more efficiently, especially next to borders where foreigners come and work illegally. [...]
[...] Helvering. Besides tax avoidance is arrangement of one's financial affairs so that one only pays the minimum amount of tax required by law”. By definition, it is always legal but is it acceptable? Individuals can organize their income so as to avoid taxation without violating fiscal rules. Like this, the taxpayer is free to decide what is the best way to declare income. Thus the tax avoidance is legal. Why does the tax avoidance exist? Owing to a high tax rate, a taxpayer is tempted to declare less income to pay less tax. [...]
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