Voluntary Disclosure in Israel – now or never!
The law in Israel obligates every person to report to Tax Authorities regarding the assets/cash/income in bank accounts abroad.
Whether the money source is a legacy from the grandmother, a donation from a distant uncle or a transaction that an individual made in the past, according to the Israeli law the owner of the overseas account is required to report it in Israel, as part of an annual report submitted to the tax authorities.
Avoiding reporting of funds abroad considered as a tax offense while the penalty can include fines and even imprisonment. These penalties deter most of the people from reporting; fearing that sudden reports of assets and funds from abroad will complicate them severely.
Israel is implementing an international reporting standard developed by the OECD, according to which banks all over the word transfer the list of Israelis owners of bank accounts abroad to the Tax Authorities, so it is reasonable to contact the Income Tax Authority before the Income Tax Authority reach the money-launderers.
Voluntary disclosure process
Tax Authorities enable individuals to report about their assets abroad by unique procedure called voluntary disclosure, which in certain cases may significantly reduce the expected tax payments and penalties, and even prevent the prison sentence. On 12 December 2017, the Tax Authorities published a voluntary disclosure update according to which a reporting to tax authorities until the end of 2018 voluntary will enable to avoid punishments.
For more information about voluntary disclosure procedure, please contact us: [email protected]