> Tax Planning
Tax avoidance and evasion are important buzz words and you need to know the difference.
Tax evasion often entails taxpayers deliberately misrepresenting the true state of their affairs to the tax authorities to reduce their tax liability and includes dishonest tax reporting, such as declaring less income, profits or gains than the amounts actually earned, or overstating deductions. Tax evasion is an activity commonly associated with the informal economy.
Tax avoidance is the legal usage of the tax regime to one’s own advantage to reduce the amount of tax that is payable by means that are within the law. There are many ways in which individuals and companies can reduce their tax liability and this is best done by thinking ahead and being proactive.