Tax experts who represent French citizens and new immigrants from France to Israel were astounded to hear about the new department. They say that the procedure is a new one that is questionable and discriminates against French Jews. In addition, various parties in the Israel Tax Authority were surprised by the details about the division, and said that the matter aroused "feelings of discomfort." Tax experts added that there was nothing else like it anywhere in the world, and that gave rise to questions about selective enforcement, inequality in enforcement, and improper targeting of Jews.
According to Advocate Itay Bracha, a tax expert who represents French clients with the tax authorities in Israel and France, "The procedure is new and questionable, and discriminates against French Jews. The measure is an extremely irregular and rare one, in which a tax authority in a foreign country is setting up a special division to handle Jews, and recruiting an exceptionally large number of employees for it."
Bracha says that there is no similar department other tax authorities anywhere in the world. "I know of no similar department to the one founded in France, and certainly not with that number of employees. There is a special department in the US because of the need for direct communication with the authorities in Israel, and taking into account the volume of trade between Israel and the US, but the main purpose is absolutely not to catch tax evaders." Bracha added, "Such a department, which constitutes extreme discrimination against Jews in France, does violence to equality between different citizens. Establishing such a department is an unacceptable statement by the authorities in France, and puts the Jewish community in a very unflattering spotlight."
"Globes": What about the immigrants from France?
Bracha: "At the present time, in contrast to the prevailing opinion in the French community, the announcement by French Jews that they are leaving and immigrating to Israel does not solve the Jews' problem. On the contrary; this act put the immigrant in the spotlight, and the authorities in France start an investigation into his case in order to detect whether he has money and assets in Israel that have not been reported in France. This is done through international exchanges of information, or through other means."
Advocate Uri Goldman from the Goldman & Co. law firm, an expert in international taxation and money laundering, says, "French Jewry is indeed wealthy, and it appears that beyond the wave of international information sharing agreements, the local tax authorities in each country are trying to act independently to trace tax evaders by themselves, without relying on information from the corresponding authority in the other country." Goldman nevertheless adds, "Although it ostensibly involves enforcement on the basis of wealth concentration and economic rationale, the focus on the Jewish community in France has the bad odor of national or political motives." He adds, "Segmenting and other cross-sectioning not based on nationality or religious affiliation can be used to trace wealth."
Goldman notes that new immigrants in Israel are exempt from tax reporting and payment of taxes for 10 years, but among wealthy people and owners of companies and other assets in France, the matter is more complicated. "When the immigrant is wealthy, there is a complex situation of adjustment between tax law in Israel and overseas through the tax conventions. This is particularly true in view of the war against unreported capital," he says. There are also those trying to calm things down before a conflagration takes place." Pearl Cohen Zedek Latzer Baratz partner and Tel Aviv international tax group chairperson Advocate Henriette Fuchs mentions that the phenomenon should be seen as part of the new era in the war against unreported capital. "In many countries, the tax authorities and the authorities in the war against money laundering have assigned special groups to keep an eye on specific sectors in the market and groups of taxpayers. In Israel, Fuchs says, "The head of the Israel Tax Authority himself traveled to Switzerland in order to reach tighter arrangements with Switzerland for the purpose of preventing the holding of illegal funds belonging to residents of Israel."
Published by Globes [online], Israel Business News - www.globes-online.com - on December 28, 2017
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