What is tax evasion? The current “Tax Collection and Management Law of the People’s Republic of my country” stipulates that if a taxpayer forges, alters, conceals, or destroys account books and vouchers without authorization, or lists more expenses or does not list or under-lists income in the account books, or refuses to declare or makes false tax declarations after being notified by the tax authorities, and fails to pay or under-pays the tax payable, it is tax evasion.
Many countries in the world also have legal provisions on tax evasion that are roughly consistent with those in my country. Argentine law stipulates that taxpayers who cheat and deliberately evade taxes will be charged with tax evasion. Denmark considers taxpayers who intentionally take the means of misreporting or false reporting to evade tax burdens as tax evasion. Luxembourg distinguishes three types of violations of tax laws and regulations, of which the third type is intentional tax evasion, including not recording revenue and concealing inventory.
The “International Tax Dictionary” has a relatively complete description of the concept of “tax evasion”: “Tax evasion” refers to evading tax burdens by illegal means, that is, taxpayers pay less tax than they should pay according to tax laws. Tax evasion may be achieved by concealing taxable income or taxable transactions, not filing tax returns, falsifying transactions, or using fraudulent means to falsely report the correct amount. The difference between tax evasion and tax avoidance lies in whether it is illegal.
It can be seen that there are two basic characteristics of tax evasion: one is illegality, and the other is fraud. If tax evasion is compared with tax saving, the difference between the two is obvious. The former violates the law, while the latter is permitted by the law; the former is a fraud on established tax obligations, while the latter is a pre-planning and arrangement of business, investment, and financial management before the tax obligations are established.