Tax Avoidance, Tax Evasion, and Tax Abuse: Limits to Tax Planning in Brazilian Law

The line separating legitimate tax planning from tax fraud is not always evident, especially because, in everyday discourse, the terms avoidance, evasion, and abuse are often treated almost as synonyms. This expanded abstract starts from this imprecision to, with the support of a video lecture and specialized bibliography — with emphasis on the works of André Mendes Moreira and Ana Beatriz Paiva Lessa Lima — reconstruct the criteria that Brazilian tax law doctrine employs to differentiate these three figures. Adopting a bibliographic and qualitative methodology, the work revisits the binomial chronology/licitness of the means as the classical reading key for distinguishing avoidance from evasion, advances to the intermediate zone represented by tax abuse — where the form is lawful, but the purpose is artificial — and culminates in the critical examination of the sole paragraph of art. 116 of the National Tax Code (CTN), a focal point of tension between the Tax Authorities and the taxpayer since the enactment of Complementary Law No. 104/2001. It is concluded that, in Brazilian law, the watershed for tax planning is not in the economic result obtained by the taxpayer, but in the coherence between the chosen legal form and the will effectively manifested in business relations.