A new voluntary disclosure procedure is expected soon

A new voluntary disclosure procedure is expected soon

Alon Kaplan | September 24, 2017 | Taxation of Trusts

At the Step Israel conference held on June 20, 2017, the head of the Israel Tax Authority ("ITA"), Moshe Asher, informed the audience that a voluntary disclosure procedure would be announced shortly to allow taxpayers to voluntarily disclose information regarding income which was not disclosed and reported to the tax authorities. The ITA would grant immunity from criminal prosecution and provide reasonable monetary arrangements. It is assumed that the voluntary disclosure procedure will be anonymous without disclosing the name of the taxpayer before the conclusion of the procedure.

.All negotiations with the ITA until final agreement will be conducted without revealing the name of the taxpayer. Only after agreement has been reached between the taxpayer's representative and the ITA will the name of the taxpayer be disclosed. If the taxpayer does not agree to the terms of the agreement, it will be possible " to withdraw" from the procedure and his name will not be disclosed.

 

To whom is the process of voluntary disclosure applicable?

A voluntary disclosure procedure is intended primarily for an Israeli resident who has accumulated income from assets held abroad:

•       In an overseas bank account

•       With a financial investment or other institution (portfolio managers or family office, insurance companies).

•       Holding shares in a foreign entity (company partnership, etc.).

•       Those who received money abroad and did not report it in Israel (by way of inheritance or otherwise).

  Someone who is entitled to money / assets abroad held for him by another person or entity.

Note: This procedure is not intended for someone who has already received a demand or inquiry from the IRS regarding the undeclared assets.

Summary:

A voluntary disclosure procedure is intended to enable a taxpayer to regulate his financial and tax affairs and include them in his declared capital in Israel.

Participation in the procedure will avoid criminal proceedings due to information exchange between countries that will come into effect at the beginning of 2018.

The procedure will enable the taxpayer and his family to arrange the future the transfer of funds to Israel.