Tax Fraud: When is Tax Avoidance a Criminal Offence?
TAXATION ISSUES: EXISTING AND EMERGING, pp. 79-100, Maples and Sawyer, eds., The Centre for Corporate and Commercial Law
20 Pages Posted: 1 Jul 2010 Last revised: 27 Jan 2012
There are 2 versions of this paper
The Thickness of a Prison Wall - When Does Tax Avoidance Become a Criminal Offence?
Date Written: June 30, 2010
Abstract
This article looks at the complex situation arising when there is a deliberate arrangement to avoid income tax and the consequences which can arise where the matter strays into the criminal jurisdiction. Knowing when an arrangement is an arrangement to avoid tax is no easy matter. The New Zealand courts have taken the view that taxpayers with arrangements close to the line of tax avoidance will have to live with uncertainty. Can taxpayers and their advisers involved in tax avoidance schemes face even more dire consequences than those arising through the disallowance of their taxation advantage and imposition of shortfall civil penalties? This article looks at when tax avoidance schemes not only cross the line of acceptable tax planning and become void for tax purposes, but go further and cross the line of legality.
In such situations consequences may arise for advisors as well as taxpayers.
Keywords: tax evasion, pecuniary advantage, prosecution for tax offences, tax fraud, tax offences
JEL Classification: K34
Suggested Citation: Suggested Citation