The tax assessment

09/06/2014

Once you have filed your tax return properly (see here for more), the tax authority will issue an assessment of the taxes that you owe based in what you have filed. This is normally on three blue-backed pages (first single-sided and the other double-sided) of A4 size. They also send some explanatory pages.

The first page is the summary of income and the tax calculation. The very bottom of the page is reserved for a payslip with which you can pay the taxes that you owe. Interest for a few weeks is normally built into the calculation; there will be a date by which you must pay before more interest kicks in.

The second and third pages show you a breakdown of the assessed income, tax due and deductions and credits given. You should check that these agree with what you filed, or understand why they are different.

The authorities will also normally issue a second assessment after having reviewed the return in a cursory matter. This is normally looking for small mistakes, such as mis-copied numbers or disallowed donations.

In the event that you are due a refund, the blurb at the bottom will tell you which bank account they have for you. You can ignore the notice which says that the refund will be processed within 45 days. By law, a refund must be paid within 90 days for those required to file (and practically it can take longer) and up to a year for those who file voluntarily.

The authorities can also request more information to be furnished before issuing a final assessment. For future reference, attach this information to subsequent returns.

The tax authority reserves the right to audit any tax return. By law, they have to start the process by the end of the third year after the tax return was filed. E.g. any return filed in 2013 can be selected for auditing until 31 December 2017. In certain circumstances, it is possible for earlier years to be audited as well, but this is very rare. The auditor will normally try, in the first instance, to reach an agreement with you – but be aware of any Bituach Leumi issues that might crop up when amending a return.

If you spot a mistake, or discover some extra paperwork after you’ve filed (this normally would be for extra tax credits or deductions), you are entitled to request an amendment to the assessment. This is done by way of letter. In general, you can amend up to 4 years after the tax return was filed.