Comment by immibis
This is a technicality created by legal tax evaders. To evade is to avoid. If you're avoiding tax you're evading tax. Sometimes it's moral, many times it's legal.
This is a technicality created by legal tax evaders. To evade is to avoid. If you're avoiding tax you're evading tax. Sometimes it's moral, many times it's legal.
That's correct. Deliberately restructuring your activities beyond common sense in order to reduce taxes even further, however, is legally evading them, by the normal definition of the English word "evade".
If you are running a business and someone points out you can reduce taxes by registering a corporation, that's normal - most businesses are some type of corporation.
If someone points out you can reduce taxes even further by registering an Irish subsidiary and sending them license fees, that's abnormal, and now you're using trickery to avoid taxes. UNLESS your business really does do R&D in Ireland at an arms-length subsidiary which charges license fees. In that case, the legal structure mirrors what is actually happening, so it's fine!
There will always be legal (but arguably immoral) ways to minimise your taxes, and there will always be illegal ways to minimise your taxes. Those are different problems with different solutions. It's a useful distinction to make, that warrants having different words.
The point people are making (to mostly deaf ears) is that many tax "avoidance" strategies are just unprosecuted tax evasion strategies. If you claim deductions you don't qualify for, that's obviously just tax evasion, but most taxpayers will get away with it. Does their lack of a conviction mean they're just tax avoiding? Of course not.. so when some company dreams up a scheme where the 'owner' of a laptop changes 6 times to various subsidiaries in countries that laptop has never entered, is that just sophisticated tax avoidance? Or is the obviously illegal scheme tax evasion? (Illegal in the sense that almost every jurisdiction has laws that will pierce transactions that only occur to minimize taxes).
The word evade has a specific meaning in English, implying avoidance by trickery. And it has a specific legal meaning, which is knowingly bending or breaking the law. They are not synonyms, especially in a tax context.