AVOIDING TAXATION

Judea Pacer
BSCE 2-1
SHIFTING
 Process by which tax burden is transferred from
one person to another without violating the law.

EXAMPLE:
Taxes paid by the manufacturer maybe shifted to
the consumer by adding the amount of the tax
paid to the price of product.
CAPITALIZATION

 This is done by reducing the price of a taxable

product or service that will be imposed on its
consumption.

EXAMPLE:
 A salesman would offer a lower price for a real
property in order to lower the real property/real
estate tax.
TAX AVOIDANCE
 Also known as Tax minimization,
 This refers to the availing by the taxpayer of
legally allowable means in reducing or
minimizing the tax due on certain properties ,
items and services

EXAMPLE:
 An owner of commercial lands converts his
properties into a corporation with his children as
incorporators. This is done in anticipation of a
much higher estate tax to be imposed upon his
heirs.
TAX EVASION
 Also known as tax dodging
 This refers to the use by the taxpayer of illegal
means in escaping, defeating or lessening the tax
due.

EXAMPLE:
When a taxpayer deliberately does not declare his
taxable items or does not pay taxes at all.
TAX EXEMPTION
 This means the bestowal of immunity by the
taxing authority on a taxpayer from the
obligation of tax payment

EXAMPLE:
 Winning in the lottery
STATUS OF TAXPAYERS
JUDEA PACER
BSCE 2-1
MARRIED TAXPAYERS

 Married taxpayers are those individuals who

are legally and lawfully married, with or without
children, or with legally adopted children. One or
both of them may be gainfully employed and/or
may derive income from any source.
HEAD OF THE FAMILY
 The head of the family refers to any unmarried or
legally separated male or female with one or both
parents, one or more brothers or sisters, and one
or more legitimate, recognized natural or legally
adopted children living with and dependent upon
him/her for their substantial or primary support.
SINGLE TAXPAYER

 A single taxpayer is any unmarried individual.

He/she may also be a widow and a widower, or a
married person who is legally separated or
annulled with no qualified dependents.