1. Australia
In Australia, tax avoidance and tax evasion are often mentioned together, because if tax avoidance is legalized, it will inevitably undermine the principle of fairness in taxation, so it should be morally condemned. However, people disagree with this, believing that tax evasion and tax avoidance are clearly distinguished. The former refers to illegal actions taken by taxpayers to reduce their tax obligations, while the latter refers to taxpayers arranging their affairs through legal means to avoid tax obligations. However, the government authorities have always been opposed to tax avoidance, and the Australian Tax Law contains this content. However, the legal definition of tax evasion is still clear. The country’s Income Tax Collection Law stipulates that it is illegal to avoid paying taxes through malicious acts, by not fulfilling or neglecting tax obligations, and by fraud or trickery.
2. Italy
The legal definition of tax avoidance and tax evasion in Italy is relatively clear. Tax avoidance usually refers to taking advantage of the imperfections of tax laws to make a taxable item not include or include less taxable burden, or to reduce the tax burden in any way; tax evasion usually refers to the violation of the law to cover up the facts that have constituted taxable as non-taxable, or to change the accounts to conceal profits, or not to submit tax returns to the tax authorities, or to submit false tax returns.
In addition, Italy proposed the concept of “tax bankruptcy” and interpreted it as the behavior of taxpayers transferring property to evade paying taxes even though the tax obligation has been formed. In fact, “tax bankruptcy” is a form of tax evasion, which is illegal like tax evasion; and whether tax avoidance is legal is controversial. The premise of tax avoidance is that there are imperfections in the law. In addition to improving tax regulations, what needs to be explored is how to interpret tax clauses, how to interpret them completely and to what extent. The Italian tax system puts forward such a principle: when applying the law, it must be carried out in accordance with the true meaning of its words and the connection between words, as well as the legislative intent. As for “tax saving”, it is considered legal in Italy.
3. United States
In the United States, tax evasion refers to malicious violation of the law in order to evade paying taxes. Tax avoidance is widely interpreted as various techniques to minimize taxation other than tax evasion. However, in practice, the boundary between the two is sometimes difficult to distinguish. The United States has formulated many anti-tax avoidance provisions. In terms of policy guidance, it is believed that artificial tax avoidance techniques are not for the needs of economic or business development, but are closely related to tax evasion and should generally be stopped.
4. United Kingdom
Although there is no definition of tax evasion and tax avoidance in British law, it is generally understood that tax evasion means that the taxpayer is dishonest, or understating income, or overstating deductible items, or concealing the tax obligations that should be borne. Tax avoidance should be honest, that is, without fraudulent means. As long as it is within the scope permitted by law, the right of enterprises to avoid taxes or minimize tax obligations should be protected.
5. Canada
In the Income Tax Act, Canada defines tax evasion as deceiving the tax authorities by fraud, concealing facts or other means to reduce tax obligations. Canada does not have a clear legal definition of tax avoidance, but the tax authorities actually divide tax avoidance into two types: legitimate and illegitimate in practice. For taxpayers who improperly evade taxes, the tax authorities will redefine their tax obligations.