Planning is an important factor in managing any undertaking, hence failing to plan is planning to fail. However, it is important to understand that taxpayers will breach tax laws if their planning fall within certain categories.
There are three strategies taxpayers can use to minimise their tax payable; namely, tax avoidance, tax evasion and tax planning.
entails complying with the taxation law through artificial scheme. For example tax payers, might claim for taxation deductions transactions which do not make any business sense in normal business undertaking. Tax avoidance can result in severe fines and/or jail terms.
This is where tax payers claim (for taxation deduction) expenses that are not business related and were not used to produce business income. Another example of tax evasion is where tax payers fail to declare income. Tax evasion lead to severe fines and/or jail terms.
Involves operating within the letter and spirit of the law to reduce tax liability, without entering into artificial schemes or arrangements. Tax planning does not incur any penalties and this is the level at which taxpayers should aim to operate.
Our experienced team in Tax Team Accountants provide adequate and effective guidance to taxpayers to make sure that they plan their tax affairs in accordance and spirit of the law and reduce their tax liabilities, while staying clear of tax evasion and tax avoidance.