TAX PLANNING AND THE THIN LINE BETWEEN TAX AVOIDANCE AND TAX EVASION: AN INVESTIGATION INTO THE LEGAL LIMITS OF TAX PLANNING

Abstract

This paper analyzes tax planning within the framework of Brazilian law, highlighting its relevance as a legitimate tool for reducing tax burdens. The study aims to clarify the key differences between tax avoidance (elisão fiscal) and tax evasion, emphasizing the legal boundaries that govern such practices. Tax avoidance is addressed as a lawful conduct, undertaken before the taxable event occurs and permitted by legislation, while tax evasion involves illegal or fraudulent means applied after the tax obligation arises. The research also explores provisions of the Brazilian National Tax Code concerning the disregard of simulated acts and the prohibition of abuse of rights, underlining the importance of compliance with legal principles. The conclusion affirms that tax planning, when conducted ethically and within legal limits, constitutes a valid and effective strategy for fiscal management, contributing to legal certainty and the stability of taxpayer-government relations.