In the headlong rush by governments around the world, including in Australia, to make announcements and put forward legislation to combat tax base erosion and profit shifting, do we risk losing sight of some important legal distinctions that have existed for many years? It may not be seen as fashionable to consider, for
example, that there is a difference, and a major difference at that, between tax avoidance and tax evasion. One is legal and the other is not. It may seem to some that the difference is pedantic but the courts have over the years paid close regard to the distinction.
Writing in the Weekly Tax Bulletin, Thomson Reuters Senior Tax Writer Terry Hayes says the mass publicity now being generated around the world about multinationals, high wealth individuals and others concerning their tax planning activities continually refers to the notion of paying a “fair share of tax” – but, what an individual or entity pays in tax is determined by the applicable laws.
The illegal minimisation of tax liabilities is not to be condoned, but concepts such as tax avoidance and tax evasion have a long history of jurisprudence that should not be ignored. If tax laws are not achieving the results governments want, maybe it’s the laws that need attention.
Read the full article in Issue 26 of the 2013 Thomson Reuters Weekly Tax Bulletin, Australia’s No 1 tax news service. Details of how to subscribe can be found here.