In the past few months, Israel Tax Authority director Moshe Asher has fired off many warnings to Israelis holding unreported capital overseas. Among other things, he has warned that the Tax Authority had "changed disk" in the way it combats black capital, and is exchanging information with banks and overseas tax authorities to expose Israeli tax evaders. Asher declared that the Tax Authority had already received lists with the names of thousands of Israelis who had large sums of money in bank accounts overseas, mainly in Europe, and that it would shortly deal with them. He estimates that "a huge amount of Israelis' black capital, amounting to tens of billions of dollars, lies overseas."
Just before the Tax Authority exposes another assessee who has concealed money and assets overseas and evaded tax, and puts him onto the mauling track of criminal proceedings, it is giving Israelis another opportunity to disclose their hidden assets voluntarily, and avoid criminal charges.
This morning, the Tax Authority published a new "voluntary disclosure procedure" that replaces the existing procedure. The aim is to encourage Israelis who have broken the law and not reported their income and assets as required, to undergo a voluntary disclosure procedure and avoid criminal proceedings.
The new procedure has provisions designed to make disclosure easier, such as the option of submitting an anonymous application, and a fast-track application that saves bureaucracy and form filling, in cases where the unreported capital does not exceed NIS 2 million, and the taxable income deriving from it does not exceed NIS 500,000.
Under the provisions of the new procedure, an assessee can disclose his assets and declare his unreported income, and pay the tax due, as long as he meets the criteria set out in the procedure. Among other conditions is a requirement that the application is made bona fide and that there is no investigation in progress at the Tax Authority into the applicant's affairs at the time that it is filed.
Applicants will pay the tax due under law on the assets and income disclosed, and will not receive any relaxations. For its part, the Tax Authority undertakes, with the approval of the State Attorney's Office, that no criminal proceedings will be instituted against assessees that meet the conditions of the procedure and pay the tax due in full.
Under the anonymous procedure, which will be allowed for one year, it will be possible to file an initial application that does not mention the assessee's personal details in order to find out the amount of the tax liability. The applicant will then be required to reveal his name and full details.
Published by Globes [online], Israel business news - www.globes-online.com - on September 7, 2014
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