PAIVA, PALLESCHI Barristers & Solicitors

The TAX PAGE

"[E]very man is entitled if he can to order his affairs so as that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax." Lord Tomlin observed in Duke of Westminster, [1936] AC 1 (House of Lords) at page 19.

tax avoidance: to lawfully minimize or reduce tax liability and a willingness to fully disclose all material information. It is the responsibility of the tax lawyer or advisor to exercise responsible judgment in distinguishing the arrangement of the taxpayer's affairs that comply with the law and that will survive administrative and judicial inquiry from those arrangements that will not. Arrangements to minimize or reduce tax liability include, but are not limited to, estate planning such as trusts, wills, retirement savings (RRSPs). Everyone may arrange their financial affairs so as to reduce the tax bite provided that such arrangements are done in a lawful manner.

What is the difference between tax avoidance and tax evasion.

tax evasion: "[T]he commission or omission of an act knowingly with the intent to deceive so that the tax reported by the taxpayer is less than the tax payable under the law, or a conspiracy to commit such an offence. This may be accomplished by the deliberate omission of revenue, the fraudulent claiming of expenses or allowances, and the deliberate misrepresentation, concealment or withholding of material facts."IC-73-10R2, dated April 24, 1978.

Tax evasion is an offence under the Canadian Income Tax Act (R.S.C. 1985). The most serious offence, generally known as "tax evasion", falls under section 239 (1) and may be prosecuted by summary conviction or, by Crown election, by way of indictment. There are also various regulatory offences under section 238 (1) punishable by summary conviction. These offences are apparently designed to protect the integrity of a tax system which is based on the idea of self-assessment and self-reporting of income. Tax evasion is an offence under the Canadian Income Tax Act and can lead to criminal charges as well.

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DISCLAIMER: The information contained in this website is of a broad and general nature and the author(s) disclaims each and every liability resulting from reliance upon such information. The general and broad information contained in this website is not intended to replace the advice of your own lawyer and you are strongly urged to retain your own counsel.