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URLhttps://taxjustice.net/faq/is-tax-avoidance-legal-how-different-from-tax-evasion/
Last Crawled2026-04-13 18:28:53 (2 days ago)
First Indexed2021-06-11 10:26:13 (4 years ago)
HTTP Status Code200
Meta TitleIs tax avoidance legal? How is it different from tax evasion? - Tax Justice Network
Meta Descriptionnull
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Boilerpipe Text
No, tax avoidance cannot be called “legal” because a lot of what gets called “tax avoidance” falls in a legal grey area. “Tax avoidance” is often incorrectly assumed to refer to “legal” means of underpaying tax (such as using loopholes), while “tax evasion” is understood to refer to illegal means. In the real world, however, this legal-illegal distinction often falls apart. Whether an activity is legal or not often does not become clear until it has been challenged in court, and much of what gets called “avoidance” turns out to be more like evasion. In 2013, a senior official at a Big Four accounting firm testified to the UK’s Public Accounts Committee, a government watchdog, that they would sell tax schemes, ie tax “avoidance” structures, to clients even if they thought there was only a 25 per cent chance they would survive a court challenge. Ultimately, both tax avoidance and tax evasion result in countries being short-changed out of billions in tax with public services, local industries and ordinary people suffering for it. For this reason, the term “tax abuse” is sometimes used by NGOs and experts instead of “tax avoidance” and “tax evasion” in order to put the focus on the cost of the activity to society instead of on the legality of the activity. For a more detailed explanation, read our short guide on tax avoidance and tax evasion here .
Markdown
[![](https://taxjustice.net/wp-content/themes/tax_justice/assets/images/logo.svg) ![](https://taxjustice.net/wp-content/themes/tax_justice/assets/images/logo_fixed.svg)](https://taxjustice.net/) - [What we’re fighting for](https://taxjustice.net/take-back-control/) - [Learning Hub](https://taxjustice.net/faq/is-tax-avoidance-legal-how-different-from-tax-evasion/) - [Topics](https://taxjustice.net/topics/) - [Collections](https://taxjustice.net/collections/) - [FAQs](https://taxjustice.net/faqs/) - [Research](https://taxjustice.net/faq/is-tax-avoidance-legal-how-different-from-tax-evasion/) - [Reports](https://taxjustice.net/reports/) - [Country profiles](https://taxjustice.net/country-profiles/) - [Indexes & tools](https://taxjustice.net/indexes-tools/) - [Tax Justice Focus](https://taxjustice.net/focus/) - [Podcasts & Videos](https://taxjustice.net/faq/is-tax-avoidance-legal-how-different-from-tax-evasion/) - [Podcasts](https://podcasts.taxjustice.net/) - [Videos](https://taxjustice.net/videos/) - [Events](https://taxjustice.net/events/) - [About us](https://taxjustice.net/faq/is-tax-avoidance-legal-how-different-from-tax-evasion/) - [Our strategy](https://taxjustice.net/our-strategic-framework/) - [Our history](https://taxjustice.net/our-history/) - [Our team](https://taxjustice.net/taxjustice_team/) - [Global network](https://taxjustice.net/global-network/) - [Funding and financials](https://taxjustice.net/our-funders/) - [Donate](https://taxjustice.net/donate-to-tjn/) [FAQ](https://taxjustice.net/faq) ##### Questions in the category of How tax havens work - [What is profit shifting?](https://taxjustice.net/faq/what-is-profit-shifting/) - [How do people hide wealth in tax havens?](https://taxjustice.net/faq/how-do-people-hide-wealth-in-tax-havens/) - [How do corporations abuse tax?](https://taxjustice.net/faq/how-do-corporations-abuse-tax/) - [What is transfer pricing?](https://taxjustice.net/faq/what-is-transfer-pricing/) - [Is tax avoidance legal? How is it different from tax evasion?](https://taxjustice.net/faq/is-tax-avoidance-legal-how-different-from-tax-evasion/) - [How did tax havens emerge?](https://taxjustice.net/faq/how-did-tax-havens-emerge/) - [How much money is in tax havens?](https://taxjustice.net/faq/how-much-money-is-in-tax-havens/) - [What is a tax haven?](https://taxjustice.net/faq/what-is-a-tax-haven/) # Is tax avoidance legal? How is it different from tax evasion? No, tax avoidance cannot be called “legal” because a lot of what gets called “tax avoidance” falls in a legal grey area. “Tax avoidance” is often incorrectly assumed to refer to “legal” means of underpaying tax (such as using loopholes), while “tax evasion” is understood to refer to illegal means. In the real world, however, this legal-illegal distinction often falls apart. Whether an activity is legal or not often does not become clear until it has been challenged in court, and much of what gets called “avoidance” turns out to be more like evasion. In 2013, a senior official at a Big Four accounting firm testified to the UK’s Public Accounts Committee, a government watchdog, that they would sell tax schemes, ie tax “avoidance” structures, to clients even if they thought there was only a 25 per cent chance they would survive a court challenge. Ultimately, both tax avoidance and tax evasion result in countries being short-changed out of billions in tax with public services, local industries and ordinary people suffering for it. For this reason, the term “tax abuse” is sometimes used by NGOs and experts instead of “tax avoidance” and “tax evasion” in order to put the focus on the cost of the activity to society instead of on the legality of the activity. For a more detailed explanation, read our short guide on [tax avoidance and tax evasion here](http://taxjustice.net/topics/tax-avoidance-and-tax-evasion/). [![](https://taxjustice.net/wp-content/themes/tax_justice/assets/images/logo_footer.svg)](https://taxjustice.net/) The Tax Justice Network believes our tax and financial systems are our most powerful tools for creating a just society that gives equal weight to the needs of everyone. Every day, we inspire and equip people and governments everywhere to reprogramme their tax systems to work for everyone. - [Blog](https://taxjustice.net/blog/) - [Podcasts ↗](https://podcasts.taxjustice.net/) - [Contact us](https://taxjustice.net/contact/) - [Donate](https://taxjustice.net/donate-to-tjn/) - [All latest](https://taxjustice.net/all-latest-activity/) - [Events](https://taxjustice.net/events/) - [Press office](https://taxjustice.net/press-office/) - [Privacy Policy](https://taxjustice.net/terms-conditions/privacy-policy/) - [Our History](https://taxjustice.net/our-history/) - [FAQs](https://taxjustice.net/faqs/) - [Jobs](https://taxjustice.net/jobs/) - [Terms & conditions](https://taxjustice.net/terms-conditions/) - [Blog](https://taxjustice.net/blog/) - [Events](https://taxjustice.net/events/) - [Press office](https://taxjustice.net/press-office/) - [Jobs](https://taxjustice.net/jobs/) #### Join our newsletter #### Thank you\! 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Readable Markdown
No, tax avoidance cannot be called “legal” because a lot of what gets called “tax avoidance” falls in a legal grey area. “Tax avoidance” is often incorrectly assumed to refer to “legal” means of underpaying tax (such as using loopholes), while “tax evasion” is understood to refer to illegal means. In the real world, however, this legal-illegal distinction often falls apart. Whether an activity is legal or not often does not become clear until it has been challenged in court, and much of what gets called “avoidance” turns out to be more like evasion. In 2013, a senior official at a Big Four accounting firm testified to the UK’s Public Accounts Committee, a government watchdog, that they would sell tax schemes, ie tax “avoidance” structures, to clients even if they thought there was only a 25 per cent chance they would survive a court challenge. Ultimately, both tax avoidance and tax evasion result in countries being short-changed out of billions in tax with public services, local industries and ordinary people suffering for it. For this reason, the term “tax abuse” is sometimes used by NGOs and experts instead of “tax avoidance” and “tax evasion” in order to put the focus on the cost of the activity to society instead of on the legality of the activity. For a more detailed explanation, read our short guide on [tax avoidance and tax evasion here](http://taxjustice.net/topics/tax-avoidance-and-tax-evasion/).
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