Israel to exchange bank account data with US

Tax Authority head Moshe Asher says a decision is being made to exchange bank account data between Israel and the US.

"The trend at the banks to examine the accounts of their customers over tax payments is spreading. This is the trend of the US against Switzerland at the moment, but it is expanding to many countries, including Israel," said Israel Tax Authority director general Moshe Asher at the conference of the Association of Public Companies in Israel and BDO Ziv Haft at the Tel Aviv Stock Exchange (TASE) today. "A decision is being drawn up to exchange information about bank accounts between Israel and US. Following discussions with the Ministry of Justice, a bill will be proposed to allow us to sign a tax convention with other countries on the exchange of information. In this way, we will be able to obtain information on Israelis overseas."

Asher's remarks followed Wednesday's report by "Globes" that Bank Leumi (TASE: LUMI) has begun sending letters to European customers asking them to present documentation from their countries of origin that the money deposited in accounts at the bank has been reported to the tax authorities.

"We're going to submit legislative amendments to include serious tax offenses as original offenses in the Prohibition of Money Laundering Law. This will help us deal with large-scale crimes," said Asher.

On the issue of the acquisition of Israeli companies, Asher said, "It happens that foreign companies buy shares in Israeli companies, and after a handsome exit, we have a situation of parent company-subsidiary, and after a while, all the intellectual property is sold to the parent company and the subsidiary is closed. Transactions are made a tenth of the value, which is unacceptable. We're dealing with this, and you can see that in the latest big deal, the sale was really in line with the company's value. We'll continue to verify that these things happen. We'll collect more, and we'll return the money to the people.

"At the same time, we have the duty to remove obstacles and help companies grow. It's true we've seen companies that have left and gone to Nasdaq, but if we want capital to be raised on the Tel Aviv Stock Exchange (TASE) as well, we need to offer the following breaks: a general review of IT companies in the Law for the Encouragement of Capital Investment - we're examining the situation and there is a proposal to include these companies in the law; and the time has come to amend the Law on Mergers and Splits, and I hope for a breakthrough and the removal of barriers this year."

As for taxes, Asher said, "There is no question that we'll lower the companies tax. We believe that companies support growth and jobs, and that it is proper to lower their tax rates."

Asher said that the tax burden on companies was under constant review. "I've established a team to examine whether the current tax plan is right or should be changed," he said. "We've seen quite a few companies using the current plan and reporting on results, but sometimes there is very aggressive tax planning. To deal with this, we've expanded filing requirements on activity and tax planning, and we've announced taxes on the distribution of dividends from valuation gains."

Published by Globes [online], Israel business news - - on February 6, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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