Tips & Strategies

On Tax AVOIDANCE & Tax EVASION

Time:

We all want to pay less tax, right?

Well, this can be done one of two ways; legally or illegally.

Let’s talk about how you can save tax legally.

This involves what’s known as “tax planning.”

As the name implies, it requires some thought or plan of a future happening. So it’s important to have an understanding of the basic tax landscape.

Tax planning does not have to be complex or sophisticated, and it is certainly not only for those who are sophisticated or wealthy.


So what’s the difference between Tax AVOIDANCE and Tax EVASION?

Generally, Tax Avoidance may involve doing something that legally characterises an item to be considered outside of a particular taxing rule, whereas generally, Tax Evasion may involve doing something illegally that has the effect of concealing or misrepresenting the taxable item of income/gain.

If there are secrets to be revealed, tax planning generally involves trying to achieve certain aims, and they are:

Reducing income;

Delaying getting the income (technically, we should say ‘deriving’ instead of ‘getting’ because you can be taxed even if you don’t physically receive the income);

Increasing allowable deductions;

Accelerating allowable deductions;

Diverting income; and

Using special concessions allowed under the rules.

Not only that, you’ll need to know:

WHAT to do  |  HOW to do it  |  WHEN to do it


About the Author

Roland has more than two decades experience as a professional accountant, business and financial adviser, including Australian Taxation Office experience. He has also presented in a number seminars, appeared on radio, and is a published commentator for a number of industry publications.

Roland holds a Bachelor of Economics (Syd), and also holds the designations of Chartered Accountant, CPA, and Financial Planning Specialist.


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