A delegation from the US Internal Revenue Service (IRS) visited Israel last week to meet representatives of the Israel Tax Authority.
Sources inform "Globes" that the purpose of the meeting was to implement the agreement for the exchange of information between Israel and the US concerning the accounts of US customers in Israel and Israeli customers in the US. The parties signed the agreement several months ago, but it has not yet been implemented, and the goal of the meeting was to advance toward its implementation.
Besides preparation by the Tax Authority, it still remains to complete the legislation. The bill on the matter passed its first Knesset reading, but the legislative process can be completed only after the elections are held two months from now. Adv. Shoshanna Shacham, a specialist in taxation and voluntary disclosure income tax settlements, notes that at the same time, the US banks began to contact their Israeli customers last October, and demanded that they sign a declaration stating that their assets were reported to the tax authorities in Israel. "Customers who do not provide this form are being asked by the bank to close their account," she said.
"What the customers who close their accounts don't know is that their name will be given later to the tax authorities in Israel in any case," says Shacham, who suggests that all holders of an account in an overseas bank whose assets are not declared in Israel should take advantage of the window of opportunity to submit a request for voluntary disclosure under the new program recently announced by the Tax Authority. The trend towards sharing of information about foreign residents and their bank accounts has accelerated in recent years in the framework of the global war on tax evasion.
As part of this trend, the authorities in Israel and the US have signed such a cooperation agreement. Banks in Israel have already demanded from their US customers a declaration that their assets were reported to the authorities in the US in the context of the Foreign Account Tax Compliance Act (FATCA) rules set in the US, which require every financial institution in the world to do this. At the same time, it is clear that even though the information sharing agreement between Israel and the US has not yet been implemented, some US banks have begun to demand such a declaration from their Israeli customers.
Published by Globes [online], Israel business news - www.globes-online.com - on January 8, 2015
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