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

Double tax avoidance and tax evasion are two distinct concepts related to international tax law. Double tax avoidance is a legal arrangement between countries to avoid taxing the same income twice. This is achieved by determining which country has the right to tax income for a particular taxpayer. The treaty that outlines this arrangement is known as a double tax avoidance agreement. On the other hand, tax evasion is illegal under international tax law. Tax evasion is the intentional avoidance of taxes by not declaring income, falsifying tax forms, and other fraudulent activities. Tax evasion is often done by hiding income or not reporting certain types of income. Double tax avoidance does not involve any illegal or fraudulent activity, while tax evasion does. Double tax avoidance is beneficial to both countries involved, as it prevents double taxation of income earned in one country by the other. This helps to ensure that individuals and corporations do not have to pay taxes twice on the same income. Tax evasion, on the other hand, is an illegal activity and is punishable by fines, jail time, or both. In New York, both double tax avoidance and tax evasion are subject to local and federal laws and regulations. It is important for individuals and companies to understand and obey these laws and regulations to ensure compliance with international tax law. Failure to comply may result in serious penalties, so it is important to be aware of the differences between double tax avoidance and tax evasion.

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

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