Difference between tax saving and tax evasion

「Tax saving 」・・・to reduce tax legally
「Tax evasion 」・・・to reduce tax illegally 

In short it’s the matter of legality when it comes to saving on tax.
What’s scary is that a tricky tax “saving” may be considered as tax “evasion”. 

There are many grey zones in tax laws and it seems like the government can change laws anytime. 
This kind of grey zone is considered as tax avoidance.

e.g. 
Tax saving:
Make a corporation where your family members are the only employees and own a real estate under corporation name. Pay salary to your family from revenues generated from real estate income so that you can save on tax.

Tax evasion:
Receive real estate income in cash which is off the book.
Or pretend as if you hired someone and made it look like the company spent money so that tax would decrease.

Grey Zone (Tax avoidance) :
An individual who owns a real estate makes a company and appoints it to manage the property and pays management fees. Filing the fees as expense to try to reduce tax.

Lately tax refund using a vending machine setup would be a good example.
Try to do tax saving as much as you could.


Difference between tax saving and tax evasion
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