Tax avoidance and tax evasion is a sensitive topic.
One is legal and the other illegal. Can you guess which is which?
I hope you got it correct! Below is a more detailed explanation:
Tax EVASION
- Is ILLEGAL.
- It is the purposeful and intentional evading of taxes to be paid.
- This is in any kind of tax whether business, personal or any other.
- It can and will land you in trouble if you are guilty.
- Accountants and tax consultants should not be involved in this activity and have to report this activity to SARS immediately.
- BC Accounting (BCAS) will not consult with anyone and will report it if any illegal activity is suspected.
Tax PLANNING
- Is LEGAL
- This is avoiding tax using legal use of deductions and allowances issued by SARS.
- All these deductions are in the various Tax Acts of South Africa (or relevant country) and can be verified accordingly. This can be done on either the SARS website (www.sars.gov.za), through the SARS call centre (080007277) or in the relevant Tax Act.
- BCAS will inform you of this activity in order for you to avoid paying tax legally.
The line between the two is quite thin and there are grey areas in both instances, as in many things in life. Tax consultants will be able to inform you on these grey areas and how to deal with them. Generally, BCAS will err on the conservative side. This is due to two reasons:
- BCAS are SARS tax practitioners and uphold the ethics and standards of the profession and SARS. They do not approve of anything less than the highest standards of integrity and ethics. This SARS status will be removed if BCAS are involved in any illegal activity.
- BCAS want to have a great relationship with their clients and upholding the safety of those clients is paramount. They would rather be conservative than run the risk of their clients getting into hot water with SARS. Reputation is a key component in our business.
Whatever your need in terms of tax advice, BCAS can help. We specialise in great relationships with our clients. It is not only about paying less tax.
This article was updated in February 2023