Tax avoidance is absolutely legal. It simply means that you structure your affairs in such a manner that you pay less tax than you would pay otherwise. However, structuring has to be done legally.
Tax Evasion is reducing your tax liability by using illegal means. Illegal means are making false refundable credits, declaring false income or deductions. Any taxes you have evaded and you get caught, you have to make up for these evaded taxes and will face heavy penalties equal to 50% of evaded taxes. There will also be interest charges from the year of evasion till the date you have paid tax Owings and penalties.
Under voluntary disclosure program you can get a break if you fix and let CRA know about your deficiencies in the past taxes.
Mansoor Suhail (Mani)
Accountant
MS TAX – BSBA – EA – ICIA – RA
Tax for Canada and U.S.A
Web: www.theaccountingandtax.com and www.taxservicesguru.com
Blog: http://taxservicesguru.blogspot.ca
416 – 283 – 8774