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Accounting & Tax vocabulary · Tax Filing & Compliance

Tax avoidance

Meaning in accounting & tax, with examples

nounAdvanced term

In accounting & tax, tax avoidance means: Arranging financial affairs within the law in order to pay less tax, for example by using allowances or choosing where to invest.

In Turkish: vergiden kaçınma, vergi planlaması

How it is used

Legal in principle, but aggressive tax avoidance is criticised and often blocked by anti-avoidance rules. Tax planning is the neutral professional term; evasion is the illegal version.

Example sentences

  1. New transfer pricing rules were introduced to limit tax avoidance by multinationals.

  2. There is a fine line between tax planning and aggressive tax avoidance.

Common collocations

  • aggressive tax avoidance
  • anti-avoidance rules
  • tax planning
  • tax haven
  • tax evasionIllegally not paying tax that is owed, for example by hiding income, using false invoices or keeping two sets of books.
  • tax exemptionA rule that removes certain income, transactions or organisations from tax, either completely or up to a set limit.
  • tax-deductibleAllowed by tax law to be subtracted from income when calculating taxable profit, which reduces the amount of tax to pay.
  • corporate taxA tax on the taxable profits of companies, calculated on the profit for the year after allowed deductions and adjustments.

More terms: Tax Filing & Compliance

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This page explains English vocabulary for learners. It is not financial advice.