Tax Authority to investigate multiple homeowners

Moshe Asher

One person with a reported monthly income of NIS 8,000 owns 22 apartments in Israel with an aggregate worth of NIS 22 million.

Figures published yesterday from a residential real estate survey for the first quarter again showed a disturbing picture of tax evasion through the real estate market.

One particular interesting item concerned a person with a reported monthly income of NIS 8,000 who owns 22 apartments in Israel with an aggregate worth of NIS 22 million. Even if this is an exceptional case, it again raises the question of what to do about the shadow economy, specifically the real estate tax evasion problem.

Israel Tax Authority head Moshe Asher told "Globes" in this context, "The Tax Authority is stepping up its enforcement in the real estate sector, which has always been major target for investments of illegal capital. As part of the Tax Authority's campaign to widen its net, over 100,000 letters were sent people who have made no income tax reports, including over 50,000 cases of individuals owning three or more residential apartments.

"Civil tax assessments will be made for each of those individuals owning an especially large number of apartments who have not made reports to the Tax Authority income tax department for years. These assessments will also clarify the source of the capital used to buy the apartments. In the appropriate cases concerning people owning an especially large number of apartments, criminal investigations are also possible."

In recent years, the Tax Authority has begun cross-checking information collected from its various databases, among other things information about reported income and information about real estate sales and the tax paid for each sale. Following this cross-checking, names of many taxpayers were found who reported very low monthly income, while owning a number of apartments for rent. The Tax Authority contacted these taxpayers in person or by letter with a demand for information, and their assets were revealed.

As part of its policy of expanding the number of those reporting to the Tax Authority and detecting tax evaders, the Tax Authority sent over 100,000 letters from its income tax department's intelligence unit to "suspicious" Israeli citizens who might have committed tax evasion, including 50,000 people owning three or more apartments who did not report any rental income.

The Tax Authority income tax department opened over 7,500 files as a result of these letters, and the people involved have begun filing tax reports. In cases of people who received letters and did not answer them, the Tax Authority is handing the cases over to its investigative units, and some of them have been summoned to a criminal investigation concerning their failure to answer the Tax Authority's query.

Published by Globes [online], Israel business news - www.globes-online.com - on June 17, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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