# Tax Avoidance vs Tax Evasion

*Taxes — Finicade finance glossary*

Tax avoidance is arranging your affairs within the law to pay less; tax evasion is concealing income or falsifying facts, which is a crime. The line is legal rather than moral, and it moves: aggressive avoidance schemes are routinely struck down retrospectively by general anti-abuse rules. The practical test is whether a transaction has any purpose beyond the tax benefit it produces.

**Also known as:** tax avoidance, tax evasion, tax planning

**Related terms:** [Tax Haven](https://finicade.com/glossary/tax-haven), [Transfer Pricing](https://finicade.com/glossary/transfer-pricing), [Tax Deduction](https://finicade.com/glossary/tax-deduction), [Disclosure](https://finicade.com/glossary/disclosure), [Corporate Tax Rate](https://finicade.com/glossary/corporate-tax-rate)

Source: https://finicade.com/glossary/tax-avoidance-vs-tax-evasion