As reported last month by "Globes," ahead of the anticipated implementation of the Common Reporting Standard (CRS) agreement for automatic exchanges of information between tax authorities, and given the Israel Tax Authority's stepped up campaign against unreported capital and its efforts to expose unreported capital in Israel and abroad, the Tax Authority today published a new voluntary disclosure procedure. The new procedure follows the success of the last voluntary disclosure procedure, which expired at the end of 2016, and following months of discussions between the Tax Authority and the Ministries of Finance and Justice.
The new procedure's goal is to enable more Israelis who have not reported all their income and capital to voluntarily disclose them and pay the legal taxes on it in order to prevent criminal proceedings. The new procedure will be in effect until the end of the 2019. Like the previous procedure, it also includes abbreviated and anonymous tracks.
The anonymous track will be in effect only until December 31, 2018. Submitting a request on the abbreviated track will be allowed in cases in which the unreported capital does not exceed NIS 2 million, and the taxable income resulting from it does not exceed NIS 500,000.
According to the provisions of the procedure, a taxpayer can disclose his assets, declare his unreported income from them, and pay the tax on it, providing that he or she meets the conditions stipulated in the procedure. Among other conditions, the disclosure must be sincere, complete, and with good will, with no examination or investigation by the Tax Authority of the taxpayer's affairs being in progress.
In the framework of the voluntary disclosure procedure reported today, petitioners will pay the legal tax on what they disclose. With approval from the State Attorney's Office, the Tax Authority undertakes not to institute criminal proceedings against taxpayers fulfilling the conditions of the procedure and paying all the tax resulting from the voluntary disclosure procedure.
In the previous voluntary disclosure procedure, which expired on December 31, 2016, NIS 30 billion was uncovered in 7,500 voluntary disclosure requests: 4,620 on the anonymous track, 1,436 on the abbreviated track, and 1,493 on the ordinary track. NIS 3 billion was collected in these procedures. Since this procedure expired, tax evaders have been unable to declare their capital without fear of criminal justice. At the same Tax Authority head Moshe Asher has repeatedly stated in recent months that the Tax Authority was taking action with the Ministry of Justice to renew the procedure.
Asher said, "In anticipation of the flow of information from overseas tax authorities under the CRS project, and from other sources, publication of the new procedure is aimed at giving an opportunity to those who have not yet set their affairs with the Tax Authority in order to fully disclose their unreported assets and income and pay the tax they owe."
Published by Globes [online], Israel Business News - www.globes-online.com - on December 12, 2017
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