Tax Evasion: Cases of Germany

Synonyms

Evasion; Financial crime; Negligence

Definitions

Tax avoidance:

It is an action taken to lessen tax liability and maximize after-tax income.

Tax evasion:

It is an illegal and intentional actions taken by individuals’ intentional illegal behavior leading to a direct violation of tax law to escape or to reduce their legally due tax obligations and hiding the real value of a legal contractor transaction to avoid or reduce fiscal liabilities.

Voluntary compliance:

It is a system of compliance that relies on individual citizens to report their income freely and voluntarily, calculate their tax liability correctly, and file a tax return on time.

Introduction

Tax avoidance uses different methods to transfer profits, fortunes, and inheritances from Germany to one of the well-known tax havens in the Caymans, Panama, or other countries like the Netherlands and Ireland (Murphy 2019). The tax laws in these countries are the basis for the biggest companies of the world for transferring...