Tax minimization

Tax minimization is more than just simply maximizing the amount of money you keep in your pocket at income tax time; it’s a long-term engagement and an important component of the overall financial planning process. SOURCE: Wmallc (2015). TAX MINIMIZATION STRATEGIES.

Tax minimization is also called "tax avoidance." It is a tax-saving device that is legally allowed. The most important element of tax avoidance is good faith. Bad faith is an element of "tax evasion" which is punishable by law.

Tax avoidance and tax evasion are the two most common ways used by taxpayers in escaping from taxation. Tax avoidance is the tax saving device within the means sanctioned by law. This method should be used by the taxpayer in good faith and at arms length. Tax evasion, on the other hand, is a scheme used outside of those lawful means and when availed of, it usually subjects the taxpayer to further or additional civil or criminal liabilities. (G.R. No. 147188)