The war that US President Barack Obama is waging against concealment of assets and tax evasion, and the legislation against tax havens that he has been promoting, is extending beyond the borders of the US and liable to affect people who hold accounts at banks in Israel. Under us regulations, a US citizen who fails to report by the end of September 2009 any account worth more than $10,000 held in a non-US bank, a savings program or a fund, will be liable to a fine of $10,000 for each offence, even if it was committed without criminal intent.
As part of the tightening of supervision of taxpayers and in a bid to step up enforcement, the US tax authority has declared that it is giving a last opportunity to holders of foreign bank accounts to submit reports on their banking and financial activity overseas (FBAR). Criminal proceedings will be instituted against US citizens who fail to report by the end of September.
”Israel, which is considered attractive for overseas investors, who obtain attractive terms for foreign currency accounts and which many see as a shelter, is liable to be hurt by the tighter controls. Under the tax treaty between Israel and the US, the Israeli tax authorities are obliged to provide information in US taxpayers,” explains Adv. Henriette Fuchs, tax partner and international tax expert at S. Friedman & Co. “The fear is that stricter control will lead to a seepage of US investment from Israel, because of the payment of tax arrears and fines in the US, or because US citizens will look for a better tax haven.”
Published by Globes [online], Israel business news - www.globes.co.il - on August 16, 2009
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