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

Double tax avoidance and tax evasion are two distinct terms that refer to two completely different activities. Double tax avoidance is a legal method of avoiding being taxed twice on a single receipt of income. It is accomplished by a country enacting a law that allows an individual or business to be taxed in one country and then exempt from taxation in another. Tax evasion, however, is an illegal activity in which an individual or business deliberately avoids paying taxes lawfully due to a government or other regulatory agency. The biggest difference between double tax avoidance and tax evasion is that double tax avoidance is a legal activity, while tax evasion is not. Double tax avoidance is allowed under certain provisions of international tax law. For example, in Washington, a taxpayer can take advantage of foreign tax credits to reduce the amount of tax they would have to pay in the United States. However, tax evasion is a crime and can result in severe financial penalties and even incarceration. Another major difference between the two practices is that double tax avoidance is often beneficial to the taxpayer. It allows an individual or business to avoid paying a large portion of their income tax, while still maintaining their compliance with the law. Tax evasion, however, has no real benefits, as it is an illegal act which can lead to fines, penalties, and even jail time. In conclusion, double tax avoidance and tax evasion are two distinct terms that refer to two completely different activities. Double tax avoidance is a legal way of avoiding being taxed twice on the same income, while tax evasion is an illegal activity that can have severe consequences.

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

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