Tax evasion vs Tax Avoidance

What is it & the difference between the 2.

A thread

Tax evasion = Illegal 🚫  Criminal
Tax avoidance = legal ✅ allowed
Tax evasion is an illegal & unlawful practice of not paying tax. A person or business structures their affairs in a way that they don't pay taxes due to SARS. This happens by not reporting their income, deducting frivolous expenses, inflating expenses, underpaying or understating
Tax avoidance on the other hand is a legal & allowed way of minimizing your tax liability. Our tax legislations allow us to structure our affairs in order to minimize your tax liability
E.g. in personal taxes, medical aid, out of pocket, RA deductions, TFSA etc. In VAT, output & input tax provisions allows for payment of lesser taxes. Business are also allowed to deduct allowable expenses, ring fence losses etc in order to minimize their tax liability
Businesses & individuals use the allowances afforded in our tax laws in order to minimize their tax liability & sars doesn't have a problem with that. In fact, it is encouraged. However, tax evasion is criminal. Sars can lay criminal charges against you & you'll be prosecuted.
It can also raise assessments to recoup all the monies you have defrauded add penalties & Interests. I won't go into the details of the TAA as I don't want to be too technical.
Here's an example if a tax evasion case. Many businesses are found in the wrong side as there's a very thin line between tax evasion & avoidance.

SARS WINS R1-BILLION TAX EVASION CASE

https://t.co/mjjAnu3gcG
Ok, now what was the noise about last night.
1. Employers have a duty to withhold employees tax & pay it over to SARS
2. Encouraging employees to rather register companies in order to aid you not to pay salaries has various consequences but I'll limit it to the following:
2.1 you don't want to fulfill your duty as an employer to withhold & pay tax to sars
2.2. The invoices will be deducted as expenses & thus reduce your business taxable income.
This is pure tax evasion
So what if they are independent contractors? You might have seen this word thrown around loosely on the TL. Sars realised that most businesses evade tax by paying their employees invoices instead of salaries. There's a lot of case law to this effect.
In order to minimize disputes, it issued interpretation notes to clarify the law dealing with this. The interpretation notes gets revised as an when theres a need. We have in note 17 that deals with employees tax for independent contractors & in note 35 that deals with psp
So what is the employees have other side hustles & the invoices is to allow them to get business elsewhere? Is the employer still liable to deduct tax? Yes, if 80% of their income comes from 1 employer.
So as an employer, the employee has to provide you with an affidavit that 80% of their income doesn't come from you.
Hope this clarifies the confusion. Please note I've not touched on other statutory obligations arising from this set up I.e. labour, uif, SDL. I've also not touched on how the set up can also disadvantage the employees re: a bigger tax liability than they would ordinarily not hav
Independent contracting, free lancing etc. is allowed & should be done within the prescripts of the law. They pay their own taxes & there are tax law provisions allowing them certain deductions in order to reduce their tax liability

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A THREAD ON @SarangSood

Decoded his way of analysis/logics for everyone to easily understand.

Have covered:
1. Analysis of volatility, how to foresee/signs.
2. Workbook
3. When to sell options
4. Diff category of days
5. How movement of option prices tell us what will happen

1. Keeps following volatility super closely.

Makes 7-8 different strategies to give him a sense of what's going on.

Whichever gives highest profit he trades in.


2. Theta falls when market moves.
Falls where market is headed towards not on our original position.


3. If you're an options seller then sell only when volatility is dropping, there is a high probability of you making the right trade and getting profit as a result

He believes in a market operator, if market mover sells volatility Sarang Sir joins him.


4. Theta decay vs Fall in vega

Sell when Vega is falling rather than for theta decay. You won't be trapped and higher probability of making profit.