Tax escapology is a term, which we probably will not find in most English dictionaries, used by some self-declared expert to identify a series of stratagems that seek to lower taxes paid by contributors. These practices are supposedly done while complying with the law; however, in reality, they are like a Russian Roulette: it could be that the cheat codes work sometimes; however, the day comes when these maneuvers are discovered and then everything collapses.
Taxes are one of the main problems worldwide. Governments turn to taxation to obtain more money that allows them to cover up their inefficiency and, on many occasions, their corrupt practices. Under the supposed maintaining the standard of life and the quality of basic services, politicians continue to increase tax pressure at all levels. Therefore, more than just a few look for advice on how to pay lower taxes.
The so-called “tax escapology” is presented as a method suggestive of allowing the reduction of tax payments. The defenders of this “method” allege that it has nothing to do with tax evasion and among the stratagems that they propose for achieving a reduction of the tax burden goes from representation expenses all the way to reimbursement for business trips. The optimism of those who advocate for “tax escapology” is so absurdly high that they assure savings of up to 50% of a business’ tax burden. This, in reality, is very difficult to achieve, at least at this percentage and with the proposed strategies.
These days, we all have the right to pay lower taxes and to not defray the enormous inefficiency of governments. Therefore, looking for alternatives to reduce the amount to be paid for taxes is legitimate and pertinent; however, one thing is clear: “tax escapology” is not a science like tax engineering is. This latter is based on the law and guarantees a result.
In the context of economic globalization, it is more and more complicated for governments to control the finances of their citizens, because the latter can open bank accounts abroad and make investments in other parts. It is in this scenario that tax engineering is being developed; it doesn’t turn to strategies that can fail at any moment, but it does use legal loopholes and differences in the tax regulations of each nation so as to obtain the reduction in taxes. An action that is illegal in one territory may be perfectly legal in another.
The term “engineering” fits well because experts in these subjects know the taxation laws of each state very well, so they can take advantage of all the loopholes that may exist. So then, like good engineers, they draw up the strategy to be followed and plan each step. The Consultants turn to low fiscal taxation countries, to double taxation treaties for noticeably avoiding or reducing the taxes that businesses or persons that contract them have to pay.
Perhaps many think that the tax engineering strategies are thought of only for big businesses and the wealthiest people; however, governments nowadays are pressuring the middle classes with higher taxes, so these strategies are increasingly more useful and applicable for all those who feel that, if well advised, they can reduce much of their tax burden.