What are the differences between double tax avoidance and tax evasion?

Double tax avoidance and tax evasion are two different processes used in international tax law in California. Double tax avoidance occurs when two countries with a double tax treaty, or an agreement between two countries, agree to eliminate the need for a taxpayer to pay tax twice on the same income. This is done by allowing the taxpayer to choose the jurisdiction that they would like to pay taxes in. Tax evasion on the other hand is illegal and should be avoided at all costs. Tax evasion occurs when a taxpayer attempts to avoid paying taxes that they are legally obligated to pay. The most obvious difference between double tax avoidance and tax evasion is the legality of the activity. Double tax avoidance is a legal process that allows a taxpayer to pay tax in only one jurisdiction and avoid paying it in two. Tax evasion on the other hand is illegal, and if caught, the taxpayer can face prosecution and may be subject to fines or jail time. Another difference between double tax avoidance and tax evasion is the way in which the tax is paid. Double tax avoidance allows the taxpayer to choose which jurisdiction they would like to pay taxes in, while tax evasion involves deliberately not paying the taxes that are legally owed. Tax avoidance does not involve breaking the law, but tax evasion does. Finally, double tax avoidance is beneficial to taxpayers as it can reduce their overall tax burden, whereas tax evasion can lead to serious penalties and criminal charges. In conclusion, double tax avoidance and tax evasion are two different processes that involve taxes, with double tax avoidance being the legal, beneficial route while tax evasion carries heavy consequences and should be avoided at all costs.

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What are the differences between double tax avoidance and tax evasion?

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