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Tax - Coggle Diagram

- - - - Cross-border shopping
        
        Involves individual users residing in higher tax jurisdictions purchasing products in nearby lowertax jurisdictions for their own consumption within the customs constraints. This can involve crossing national borders, particularly where such border crossing is freely or relatively easily done (as between the European Union Member States) or can take place within a given country where there are significant differences in subnational taxes (as in Canada where provincial taxes differ, or in the United States where state and local taxes can vary considerably across jurisdictions). Within some countries, this also involves purchases from shops located in tax-exempt areas, such as Aboriginal reserves in Canada and Native American reservations in the USA. In some cases, there are limits on how much can be purchased outside of the jurisdiction in which the individual resides (e.g. the European Union), while in others the individual is supposed to pay the difference between the tax in their home jurisdiction and the tax they have paid on the products purchased in other jurisdictions (e.g. in various US states). However, enforcement of these provisions is difficult.
      - Duty-free shopping
        
        in this case involves the purchase of tax-¬free tobacco products purchased in airports, on airlines, and in other travel--related venues. Again, most governments impose limits on how much an individual can purchase and bring home from dutyfree sources.
      - Tourist shopping
        
        involves the purchase of products in more distant jurisdictions, again subject to the constraints imposed by customs laws and/or other policies . This is a more limited phenomenon, but can account for a significant share of overall product sales in popular tourist destinations
      - Compras por internet y otros
        
        involves individual tobacco users buying tobacco products online, through the mail, or over the phone from establishments based in lowtax jurisdictions for consumption in their own higher tax jurisdiction.
      - Industry reformulation or repositioning
        
        Tobacco companies can reduce the tax imposed on their products by reformulating or repositioning their products. For example, in countries with multitiered tax structures where higher taxes are levied on higher-priced brands, a company can lower the price of its product so that it moves from a higher tax tier to a lower tax tier. As occurred recently in Germany, where cigarette taxes are based on quantity, companies produced long cigarettes that were readily cut into smaller, standard size cigarettes, effectively reducing the tax per cigarette
- - - - illegal transportation, distribution, and sale of large quantities of tobacco products, conducted by criminal networks, that generally avoid all taxes.
    - - This type of tax evasion refers to the production of tobacco products contrary to law. The laws in question may be taxation laws or other laws (such as licensing or monopoly-related laws) that restrict the manufacture of tobacco. This type of tax evasion includes underreporting of actual production quantities with the difference between reported and actual production diverted through illegal channels or, in some cases, complete avoiding of reporting with all production diverted to black markets. This type of illegal manufacturing is more likely to occur in countries without effective tax administration that includes monitoring of actual production, and in regions where distribution of the illegally produced cigarettes is relatively easy. Counterfeit tax stamps are often applied to illegally manufactured products when these products are distributed in countries that require tax stamps. The destination of the illegally manufactured cigarettes can be the domestic or a foreign market. Illicit manufacturing includes counterfeiting.
    - - Counterfeiting involves the production and distribution of products bearing a trademark without the approval of the trademark owner. These products are produced illegally, often bear counterfeit tax stamps (depending on where they are being sold), and are distributed through the networks established by large-scale smuggling operations