When taxes due are deliberately hidden or misreported, it becomes tax evasion. Unlike avoidance, this is illegal. It can involve underreporting income, inflating expenses, or moving money through undeclared channels.

Authorities use audits, data matching, and international cooperation to detect evasion. Penalties are often severe, including fines, back taxes, and in serious cases, criminal charges.

Beyond legal consequences, evasion undermines public finances and shifts the burden to compliant taxpayers. Businesses found evading taxes also face reputational damage that can outlast any financial penalty.

Common forms

• Failing to declare income
• Falsifying accounts or invoices
• Using undeclared offshore accounts
• Paying or receiving cash to avoid records