TAX AVOIDANCE: Definition and Prevention Issues Cover Image

TAX AVOIDANCE: Definition and Prevention Issues

Author(s): Mileva Anđelković
Subject(s): Law on Economics
Published by: Правни факултет Универзитета у Нишу
Keywords: tax avoidance; aggressive tax planning; anti-abuse legislation

Summary/Abstract: The problem of resolving issues pertaining to tax avoidance, and particularly its aggressive forms, has been the focal point of discussion among tax scholars which is increasingly gaining attention of politicians alike. As opposed to tax evasion (which is illegal), the phenomenon of tax avoidance calls for careful consideration of state fiscal interests and a highly precise demarcation of the thin line between the acceptable and unacceptable conduct. In many contemporary states, tax avoidance (which implies a formal behaviour of tax payers within the limits of tax legislation but contrary to the tax regulation objectives) is declared to be illegitimate. State authorities do not want to tolerate such activity, which results in tax payers’ reduction or avoidance of tax liabilities. We should also bear in mind that all tax payers have the tax planning option at their disposal, by means of which they make sure that they do not pay more tax than they are legally obliged to. However, in case they skilfully use the tax regulation flaws and loopholes for the sole purpose of tax evasion, and/or resort to misrepresentation and deceptive constructs, they are considered to be exceeding the limits of acceptable tax behaviour. In comparison to the specific anti-abuse measures which have been built into some national tax legislations, there is a growing number of states that introduce the general anti-abuse legislations, which is based on judicial doctrines or statutory legislation. Yet, there is a notable difference among the envisaged anti-abuse measures depending on whether the national legislation is based on the the Anglo-American or European-Continental legal system. The efficiency of applying these general anti-abuse rules in taxation largely rests on their interpretation as well as on their relationship with the principle of legality.

  • Issue Year: LIII/2014
  • Issue No: 67
  • Page Range: 79-97
  • Page Count: 19
  • Language: Serbian