What is Tax Avoidance?

Tax avoidance refers to the act of reducing tax liability to the minimum by the taxpayer without violating the provisions of the tax law. Western economists generally believe that there is a principle difference between tax avoidance and tax evasion, that is, the latter is illegal, and the former is not illegal. It just uses the loopholes in tax law to the maximum extent, and only pays less or does not pay taxes. Tax avoidance methods can be divided into two major levels: Low-level tax avoidance can be the use of legal means to reduce or avoid taxation, such as using another tax rate allowed by the tax law or another method of estimating taxable income; or refusing to purchase tax-included Goods and so on. [1]

[bì shuì]
1. Interest-driven. Driven by benefits, taxpayers, in addition to making a fuss about cost
Although tax avoidance does not violate existing laws and regulations, its harmfulness cannot be ignored.
There are clear differences between tax avoidance and tax evasion:
With the gradual establishment and improvement of the socialist market economy system, especially after China's accession to the WTO, enterprises are involved in foreign exchanges and operations.
Our country
There are various ways for companies to avoid taxes. According to the current situation, the commonly used methods are mainly the following:
1. Use
BritishVirginIslands English abbreviation (also known as the British Virgin Islands). Located between the Atlantic Ocean and the Caribbean Sea, 100 kilometers east of Puerto Rico, there is a group of 50 islands.
Tax haven
The connection with investment is: it is a famous "tax haven" in the world!
In 1984, the island government passed the International Business Company Law, allowing foreign companies to set up "offshore companies" on the island, providing very preferential policies: Companies established on the island are exempt from paying annual business license renewal fees, All local taxes; the company has no minimum registered capital, any currency can be registered as capital; a registered company only needs 1 shareholder and 1 director, and company personnel do not need to hire residents of the island; The annual report may not be made public. For this reason, many companies have registered a shell trading company on the island to evade tariffs, which has become an open secret.
Crackdown on tax avoidance by multinational companies
Indian tax officials said that India is actively working on tax issues for Indian domestic multinationals, trying to control its budget deficit, especially for the domestic computer business and business within the commercial organization.
Indian tax officials say India has targeted tax audits on transfer pricing by some multinational companies in recent years, but the Indian government has expanded its investigations in the past 12 months.
Tax avoidance

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