Five “illegal” ways to lower business taxes you should avoid

Five “illegal” ways to lower business taxes you should avoid

Each day, the army of shrewd people continues to search for legal and illicit systems to evade tax authorities and avoid too high taxes

Proving that all try to ” do “. Tax evasion should not be encouraged or appreciated. We are the first to call it a metastasis of our system. And you should know how to pay your taxes.

Let’s find out which systems are most used to avoid taxes.


It is a common practice for entrepreneurs, professionals, and others to donate money to non-profit companies. This can provide a substantial tax benefit of up to 26%. Or they may even be able to promote a charitable cause by starting a non-profit or amateur sports club.


A timeless and classic way to evade tax authorities. I get an invoice to certify an operation, then I pay the invoice and the amount is returned in cash by the person who issued it. This happens precisely because there has not been a transaction. In 98% of cases, the ” false bill” is issued by a ” Paper Company” that does not perform a real activity but has the purpose to produce ” paper”.

Or issuing invoices related to non-existent operations to reduce the taxable amount for the first company, correspondingly to an increase in taxable amounts of the ” paper mill “. This latter is a temporary arrangement that allows other companies to avoid tax authorities. It will be liquidated after a brief time.


It is an alternative to false invoicing. In this instance, paper companies are not used. However, this practice is used in real commercial relationships between two companies or professionals.

It involves the indication on the invoice that the actual fees are higher than the ones charged. This is a very common practice in professional and intellectual services. It can be very difficult to track the exact amount of the service. Only companies who can issue invoices for a higher amount than the actual service rendered can do so.



This is a common practice in many businesses, particularly where the purchase is fast and for low amounts (bars or restaurants, tobacconists, etc.). For services at home (maintenance and installations, works masonry), it is acceptable. Not issuing the invoice or receipt regularly.

This small game can help business owners save thousands of euros each year in tax. Like this, it is common to under-invoice operations or issues an invoice lower than the service rendered to avoid tax authorities. This is a common practice when working with people who can’t download costs. What about doctors who accept a discount of just under 20% that the taxpayer can deduct from tax authorities?


To reduce the revenue of companies at the end of the year, it’s common to “underestimate”, or underestimate inventories. This significantly influences the tax determination of taxable income. This leads to a drop in income for the year.

Two methods can be used to underestimate:

  • Declaring quantities that are lower than the stock in the warehouse
  • Underestimating the amount of work that is still in progress for an order which will be invoiced the next year.

It is important to note that this practice is often used in times of crisis like the current one. Many entrepreneurs tend to overestimate their inventories to increase their revenues. This is especially true if the banks must screen the balance sheet for the renewal of credit lines.

We wrote this article to warn you about tax evasion, which is one of the most serious problems. You can save money on taxes every year by investing part of your profits and having a prudent and correct administration of your business.

It is better to take a chance than to lose your business. Instead, try to make it more profitable by using a method that gives you steady customers and keeps them coming back.