The tax avoidance or tax avoidance It is a type of strategy that aims to pay less taxes through methods and interpretations of tax laws that can vary from one country to another and that they must have a legal character so as not to incur crimes that can be punished even with years in prison as criminalized by the laws.
To learn more about this concept, it is necessary to start by defining the words that compose it. Avoid, for example, it is a term that in the matter of tax law is related to avoiding some type of obligation and that together with the word taxes we will know below.
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In this article you will find:
What are taxes?
The current social organization has become what it is today thanks to taxes, which from the beginning were paid as tribute to kings and emperors. Today governments are paid in exchange for certain benefits, such as the protection and guarantee of rights.
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They are defined as the tribute that people and companies pay for collective spending, although there are different types of taxes that we pay daily for food or clothing or for using certain services and that many Sometimes they can add up or be expensive, this being the time when companies and individuals look for ways to circumvent Some.
Definition of tax avoidance
According to experts in tax matters the tax avoidance It has been around since the beginning and is defined as cunningly done actions to avoid paying taxes. Many experts today define this as a hoax or illusion that allows postpone or reduce the payment of said taxes, interpreting the different laws and manipulating them for this purpose.
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According to certain currents of thought, avoiding is related to covering up an aggravated fact and giving it the appearance that it is a different one, subject to a different rule or norm. According to this definition, these actions are carried out with the purpose of deceiving those who apply these rules.
Forms of tax avoidance
Many companies employ the method of establish a subsidiary or even the company itself in a headquarters that is considered a tax haven and thus reduce enormously the payment of taxes and although this is one of the most used there are other such What:
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Separate entities
These actions are carried out without the need to make changes in the country of residence, this can be done with the creation of a foundation to which the property can be transferred, this being an image or some patent or property of origin intellectual.
Today many corporations use this form of tax avoidance by depositing their trademark rights in countries such as the Netherlands, in the which is paid little for these rights and in this way they can charge for the rights of their brand internationally and keep the themselves.
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Inaccurate legal terms
This form of circumvention is carried out when the legal concepts or terms are interpreted in a way that benefits the amount of taxes that will be paid. In many cases it is done by manipulating thin lines such as the difference between personal expenses and business expenses.
Tax exemption
They are the forms or techniques that can free a certain company or person to pay a tax. It is a type of privilege among which are the principles of equity that establish that each individual must contribute according to their economic capacity.
Here also enter the well-known economic policies that affect the payment of taxes according to the actions that a given government adopts. In most cases these exemptions are created to provide some kind of support or benefit to the taxpayer and should not be confused with the term tax deduction.
Manipulate transfer prices
This is one of the grayer spots in the tax avoidance And it is how many companies obtain raw material at a low price at a certain point and sell it through subsidiaries until they reach the destination final with an apparent over-price that allows a low-cost production with high profits and thus also avoiding the payment of taxes in the process.
What is tax planning?
It could be considered as a last way to avoid paying taxes in a way that does not violate the laws and is within the legal frameworks. Here enter all the measures that the taxpayer takes in order to take advantage of the different tax benefits that the laws may offer.
As we mentioned before, different currents of thought are for or against these practices, mainly because some experts in the field perceive these practices as unethical.
Ethics and tax avoidance
The conflict that exists in these practices lies in their proximity to techniques that could be considered illegal and this makes very difficult for the authorities to differentiate or establish what can be considered a tax fraud or a legitimate elusion. In this way, individuals and companies take advantage of these loopholes to manipulate certain tax laws in the same way as they do with other laws.
We can conclude that these practices can be used unscrupulously to take advantage of tax laws but that are part of the tax collection system, which for many economists itself is seriously flawed and benefits only a few few.
