ibc v2

Offshore Companies (IBC)

An Offshore Company is an artificial person or legal entity created under the authority of the law and capable of rights and obligations.

read more
offshore bank account

Introduction to Banking Services

Panama is considered one of the most important financial centers of the world. Panama is gifted with the presence of many international banks as well as local banks.

read more

Offshore Private Foundations (PIF)

A Private Interest Foundation (PIF) is a legal entity wherein a person, denominated as Founder, transfers or donates goods and assets to a Foundation

read more
banner main llc

Limited Liability Companies (LLCS)

Its main and most important characteristic is that the responsibility of the partners is restricted exclusively to the capital provided by each one.

read more

Difference between tax evasion and tax avoidance

Difference between tax evasion and tax avoidanceDifference between tax evasion and tax avoidanceWhen discussing tax strategies to pay less taxes, we must draw a clear line between tax evasion and tax avoidance. Tax avoidance is a legal concept that involves tax payers using legal strategies to avoid paying taxes.

Thus, tax avoidance is based on the interpretation of tax laws and its omissions. With the help of an accountant or lawyer, the person or company will benefit from the tax laws of their country to reduce tax charges from taking advantage of ambiguities in the legal texts that allow different interpretations or create conflict with other existing regulations.

Unlike tax avoidance, tax evasion involves tax payers using illegal strategies to avoid paying taxes. This can be done by not filing a tax return or when information on business operations is changed in order to get a smaller tax base. This is considered fraud and, as such, is punishable by law. The taxed activity is hidden to the tax authorities by illegal methods such as hiding income, illicit increase of deductible expenses and acquisition of unwarranted subsidies.

This difference between tax avoidance and evasion can be clearly seen in the submission of tax returns filed to competent state agencies. In case of tax evasion, the return will show an annual income statement lower than that actually obtained by commercial operations. Unlike tax evasion, when incurring in tax avoidance, all earned income is declared but this tax base is balanced with tax credits and deductions.

To explore in more depth the differences between tax evasion and tax avoidance, Delvalle & Delvalle legal services suggests making an appointment with your lawyer and accountant so they can advise you on the tax laws in force in the country where your company conducts its business in order to function in the context of law.

To discuss your case in detail, make an appointment with our lawyers.

Over 10 years of experiences advising clients from all over the world.

10 años de experiencia

Latest Articles

@DelvalleLaw - Twitter

Delvalle & Delvalle

Dear Clients; Please take note that our office will be closed on Monday 11 November due to National Holidays. Our office will re-open November 12, on a regular schedule. Best Regards

Delvalle & Delvalle

Felicidades Panamá, 116 años de Republica!

Delvalle & Delvalle

Dear Clients; Please take note that our office will be closed on Monday 4th, November 2019 and Tuesday 5, due to National Holidays. Our office will re-open November 6th, on a regular schedule.

Delvalle & Delvalle

Felicidades Panama, 500 años ! Primera ciudad fundada en el litoral pacifico en america!

Delvalle & Delvalle

El proximo 1ro de julio nuestra oficina permanecera cerrada por motivos feriados en Panama, toma de posesion de presidente electo; Next July 1st, our office will be closed for holiday reasons in Panama, President-elect takes office.

Footer Delvalle & Delvalle logo


Aquilino de la Guardia Ave. &
47 Street, Bella Vista
Ocean Business Plaza Building
(Banesco Tower)
12 Floor, Suite 1203
Panama City, Rep of Panama.