Israel Voluntary Disclosure Ended: What German
Residents Should Review
A practical Germany-Israel guide for individuals and families with Israeli assets, income, inheritance, or relocation plans
Israel’s 2025 Voluntary Disclosure Procedure is no longer open. This article focuses primarily on people living in Germany and on Israeli-German families. Residents of Austria, Switzerland, or other jurisdictions should obtain a separate review under the rules applicable in their country.
The practical question is no longer whether an application can be submitted under the Israeli procedure. The more important question is what should be reviewed now if there are Israeli bank accounts, investments, real estate, company interests, inherited assets or income that may not have been fully reported.
For many cross-border families, this is not a single isolated tax question. It may involve tax residence, the Germany-Israel tax treaty, reporting obligations in two countries, inheritance, relocation, foreign financial accounts and the source of funds. These issues should be examined together before any approach is made to a tax authority.
What changed when the procedure ended?
The temporary Israeli procedure was announced with a deadline of 31 August 2026. The Israel Tax Authority subsequently announced that the procedure had ended.
The procedure was designed to provide a defined framework for correcting certain tax reporting failures and, subject to its conditions, addressing potential exposure to enforcement or criminal proceedings. It was not a general amnesty, and its protections were not automatic.
The end of the procedure does not mean that every person with an Israeli asset has a tax problem. It also does not erase reporting obligations relating to earlier years. The appropriate next step depends on the facts of each case, including:
– Where the individual or company was tax resident
– What income, assets or transactions were involved
– Which years are relevant
– What was reported in Israel and Germany
– Whether an authority or financial institution has already raised questions
– Whether any investigation or enforcement process has begun
Why the Germany-Israel connection matters
A person may live in Germany while holding assets or receiving income in Israel. Another person may have moved from Germany to Israel, or may be planning to do so. A family may have inherited property in one country while maintaining financial accounts in the other.
Tax residence
Citizenship alone usually does not answer the tax question. The analysis may involve the individual’s home, family, work, business activity, time spent in each country, and overall center of life during each relevant period.
A change of address or registration does not necessarily determine the complete tax position. Residence should be reviewed under the relevant domestic rules and, where necessary, under the Germany-Israel Double Tax Treaty.
Reporting in both countries
Reporting an asset or income in Germany does not automatically satisfy every Israeli requirement. Conversely, reporting in Israel does not necessarily resolve the German position.
The same income may need to be reported in one or both countries, even where a treaty or foreign tax credit mechanism prevents the same income from being taxed twice. Reporting obligations and tax liability are related, but they are not identical questions.
Treaty protection
The Germany-Israel Double Tax Treaty may help allocate taxing rights and reduce double taxation in appropriate cases. However, treaty benefits are subject to conditions relating to tax residence, the type of income, beneficial ownership, documentation and domestic law.
The treaty does not replace tax returns, disclosure obligations or proper documentation. It should be used as part of the analysis, not as a substitute for it.
Situations that may require a review
A professional review may be appropriate in situations such as:
– A German resident who owns an Israeli apartment, bank account, securities portfolio or company shares
– A person who receives rent, interest, dividends or capital gains from Israel
– An Israeli citizen who lived in Germany and returned to Israel after several years
– A German citizen or dual national planning to relocate to Israel
– A family that received Israeli or German assets through an inheritance or gift
– An individual whose source of funds was not fully documented when an Israeli account or investment was opened
– A business owner who managed an Israeli or German company from the other country
– A person who filed tax returns in one country but did not examine the consequences in the other
An Israeli asset is not automatically an Israeli tax violation. The existence of a bank account, apartment or inheritance does not by itself establish that tax was avoided or that a criminal offence occurred. The relevant question is whether the asset, income, transaction and reporting history were treated correctly under the law applicable to the person during the relevant period.
Build a complete cross-border file before choosing a route
Before deciding how to contact the authorities or whether corrective filings are required, it is usually important to prepare a structured factual file.
- Prepare a residence timeline. Document where the individual lived and worked during each relevant year, including relocation, immigration to Israel, a return to Israel, changes in family residence, and changes in business management.
- List the assets and income. Include Israeli and foreign bank and investment accounts, real estate, company shares, partnership interests, loans, capital contributions, rental income, dividends, interest, and capital gains.
- Review the reporting history. Collect tax returns, schedules, payment confirmations, tax residency certificates, withholding documents and correspondence with accountants or tax authorities.
- Document the source of funds. Bank statements, inheritance documents, sale agreements, loan agreements and historic tax records may be important in understanding how an asset was acquired.
- Check the current procedural position. Establish whether an authority, bank, or other financial institution has already issued a notice, audit request, information request, or other communication.
What options may exist after the procedure?
There is no single replacement route that applies to every case. Depending on the facts, the appropriate course may include:
– Filing amended or late tax returns
– Correcting missing income reports
– Reporting assets or transactions that were previously omitted
– Calculating and paying tax, interest, or applicable penalties
– Preparing a structured submission to the Israel Tax Authority
– Coordinating the Israeli and German tax positions
– Establishing a compliant reporting framework for future years
– Confirming that no correction is required after the facts have been reviewed
The fact that the Voluntary Disclosure Procedure has ended does not mean that no corrective action is possible. It does mean that the available path must be assessed carefully and that no particular outcome should be assumed in advance.
In complex cases, submitting information before understanding the full position may create avoidable difficulties. A complete review should generally come before a voluntary approach, especially where several tax years, foreign assets, substantial amounts or possible enforcement issues are involved.
Relocation, new immigrants and returning residents
Moving to Israel may create important tax and planning questions for a person who previously lived in Germany.
New immigrants and returning residents may, depending on their personal circumstances and the applicable rules, be entitled to certain Israeli tax benefits. Eligibility can depend on factors such as the period spent outside Israel, the date of return, the individual’s tax residence, the source of income and the nature of the assets involved.
These possible benefits should not be confused with a general exemption from reviewing earlier years. A person planning to move to Israel should therefore consider both the historic reporting position and the way future residence, income and investments should be structured.
Inherited assets and family wealth
Inheritance is another area where Germany-Israel analysis may be required.
Receiving an inherited bank account, property or securities portfolio does not automatically mean that the recipient has received undeclared taxable income. However, the source of the asset, the date of the inheritance, the identity of the owner, income generated after the inheritance, and reporting in each country may all be relevant.
The position may become more complicated where the deceased was resident in a different country, the inheritance moved through several accounts, the asset generated income, the recipient later moved between Germany and Israel, or the family has not maintained complete documentation.
Cross-border inheritance matters should be reviewed early, particularly before selling property, transferring funds or restructuring ownership.
Companies, founders and business owners
Although many voluntary disclosure questions involve individuals, similar issues may affect companies and their owners. A German company operating in Israel, an Israeli company managed from Germany or a founder with activities in both countries may need to review permanent establishment exposure, management and control, tax residence, intercompany payments, dividends, payroll, accounting and local filing obligations.
An unresolved reporting issue may also affect banking, investment, due diligence, a company sale or the ability to transfer funds between countries.
Frequently asked questions
Can income or assets be regularized without a Voluntary Disclosure Procedure?
Possibly. Depending on the facts, amended returns, late filings, tax payments, a structured submission, or another corrective process may be considered. There is no universal route and no automatic immunity.
Should I contact the Israel Tax Authority on my own?
In a simple case, a person may be able to take certain steps independently. Where foreign assets, several tax years, substantial amounts, residence questions, or possible enforcement implications are involved, a professional review should generally take place before information is submitted.
Does moving to Israel resolve historic tax issues?
No. Immigration or a return to Israel may create future planning opportunities, but it does not automatically resolve earlier reporting questions.
Does the Germany-Israel tax treaty remove the reporting obligation?
No. The treaty may allocate taxing rights and provide relief from double taxation where its conditions are met. It does not eliminate domestic filing, documentation, or reporting requirements.
Does holding an Israeli bank account mean that I have breached Israeli tax law?
Not necessarily. The tax consequences depend on the account holder’s residence, the source of the funds, the income generated, the relevant years, and the reporting history.
Can an inherited asset be treated as undeclared income?
Not automatically. However, you may need to examine the inheritance, its source, any subsequent income, and your reporting position in Germany and Israel.
How Allwira & Angel can help
Allwira & Angel works at the Germany-Israel intersection, supporting German residents with Israeli assets, Israeli residents with German assets, new immigrants, returning residents, families with cross-border wealth, and companies operating between both countries.
Depending on the circumstances, the work may include:
– Mapping the individual or family’s Germany-Israel tax position
– Reviewing Israeli assets, income and historic reporting
– Coordinating tax, accounting, legal and financial professionals
– Assessing relocation and returning-resident questions
– Reviewing inheritance and cross-border asset issues
– Establishing a practical plan for corrective action and future compliance
The objective is to replace uncertainty with a documented understanding of the facts and a clear sequence of next steps.
If you live in Germany or another German-speaking country and have Israeli assets, income, inheritance, or relocation plans, contact Allwira & Angel for a structured Germany-Israel review.
This article is provided for general informational purposes only. It does not constitute tax, legal, accounting, or financial advice and does not create a professional-client relationship. International tax matters depend on the specific facts, applicable domestic law, treaty provisions, and current administrative practice. Qualified professionals should review each case individually in the relevant jurisdictions.
Ofir Angel
Managing Partner | International Taxation & Cross-Border Business