Criminal Law, Tax Evasion, Shams, and Tax Avoidance: Part I – Tax Evasion and General Doctrines of Criminal Law
New Zealand Journal of Taxation Law and Policy, Vol. 2, pp. 3-16, 1996
17 Pages Posted: 13 May 2010 Last revised: 13 Apr 2015
Date Written: 1996
Tax evasion is where a taxpayer declares a smaller income in his or her return, by mistake or by fraud. Evasion can be either innocent or fraudulent. Innocent evasion may lead to reassessment, fraudulent may lead to criminal prosecution as well as reassessment. Evasion is addressed in the Tax Administration Act 1994; and serious cases can be penalised under the Crimes Act 1961 section 229A(b). Avoidance is where taxpayers construct their affairs so as to minimise tax or maximise deductions. The Income Tax Act 1994 sets out a statutory anti-avoidance rule. Some cases of tax avoidance may also amount to evasion.
Keywords: Income Tax, Income Tax Act 1994, Tax Evasion, Tax Avoidance, Tax Mitigation, Fraudulent Evasion, Innocent Evasion, Shams, Criminal Law, Crimes Act 1961
JEL Classification: K34
Suggested Citation: Suggested Citation