{"id":8543,"date":"2025-09-30T13:41:13","date_gmt":"2025-09-30T13:41:13","guid":{"rendered":"https:\/\/aboulafia.co.il\/?p=8543"},"modified":"2025-09-30T13:41:13","modified_gmt":"2025-09-30T13:41:13","slug":"voluntary-disclosure-procedure-announced","status":"publish","type":"post","link":"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/voluntary-disclosure-procedure-announced\/","title":{"rendered":"Voluntary Disclosure procedure announced"},"content":{"rendered":"

Yesterday (7th September 2014), the Israeli tax authority finally published their long-awaited and anticipated Voluntary Disclosure\u00a0scheme.<\/p>\n

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Anyone who has committed a tax felony, be it related to Income Tax, VAT, Mas Shevach (Land Appreciation Tax) or Customs, can now come forward, report the income, pay the tax (including all interest and fines), and \u2013 provided they meet the other criteria \u2013 get immunity from criminal prosecution.<\/p>\n

The immunity from prosecution is dependent on the taxpayer meeting a number of criteria. In general, these require that a full and thorough disclosure be given. Furthermore, it is a requirement that\u00a0the taxpayer cooperates fully with the Authorities during the entire procedure.<\/p>\n

It is also required\u00a0that an investigation has not been started on the taxpayer regarding non-reporting of income or assets \u2013 either by the tax authority or some other governmental agency (including the police). Although this has yet to be confirmed, it appears that receipt of the \u201cfishing\u201d letter recently (see more\u00a0here<\/a>) would not prevent someone from entering the procedure.<\/p>\n<\/div>\n

<\/div>\n
The head of tax authority has indicated that there are now multiple sources of information that the authorities can and are\/will be\u00a0using to discover tax evasion, and they will be hitting people hard. One has to assume that, as well as severe fines, there is the intention to prosecute offenders.<\/div>\n
<\/div>\n
\n

As such, it is highly recommended that anyone who has unreported income or transactions to\u00a0enter the scheme as soon as possible. The only generous aspect is that the procedure is in place as of now, and until 31st December 2016. Of course, it would be wise to get your application in much sooner than that, so as to reduce the chances of the authorities having started an investigation.<\/p>\n

At present, the exact mechanics of the scheme are not entirely clear. But, in general, the process will work as follows:<\/p>\n

(1) Application is made to the Investigations Bureau of the Tax Authority (by email!!). They will either approve the application or reject it.<\/p>\n

(2) Assuming the application is accepted, the file is passed to the local Tax Assessor, who will agree the taxes to be paid \u2013 including interest & linkage, as well as fines if the Assessor deems fit.<\/p>\n

(3) Payment of the tax due by the taxpayer.<\/p>\n

(4) No criminal prosecution is guaranteed.<\/p>\n

Simultaneous to the disclosure procedures, the Tax Authority also published a Temporary Order. This gives two interesting options, available only for a year (i.e. until 6th September 2015):<\/p>\n

(1) Anonymous Route \u2013\u00a0you can enter the procedure without intially disclosing your name or other identifying details. Of course, all income and assets need to be described and detailed. Within 90 days of the file being passed to the local Assessor, you have to disclose your name for further checks \u2013 although this can be extended by a further 90 days if the local Assessor deems this necessary and reasonable.<\/p>\n

(2) Green Route \u2013 if the unreported assets are valued at less than 2 million NIS, and the unreported income totals less than 500,000 NIS (seemingly the total unported income), the local Assessor will not investigate the amounts of tax to be paid, but will rather simply issue a payslip for payment of taxes. One cannot be anonymous for this route.<\/p>\n

One further clarification given is that capital losses reported by the disclosure can only be offset against income and gains reported in the disclosure. Furthermore, any pre-existing losses cannot be used for offset, nor will any resulting loss be available for future offset.<\/p>\n

The Voluntary Disclosure procedure can be seen\u00a0here<\/a>\u00a0(Hebrew)<\/p>\n

The Temporary Order can be seen\u00a0here<\/a>\u00a0(Hebrew)<\/p>\n

In summary, anyone with any unreported income is strongly advised to take this opportunity offered by the authorities to come clean and report.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Yesterday (7th September 2014), the Israeli tax authority finally published their long-awaited and anticipated Voluntary Disclosure\u00a0scheme. Anyone who has committed a tax felony, be it related to Income Tax, VAT, Mas Shevach (Land Appreciation Tax) or Customs, can now come forward, report the income, pay the tax (including all interest and fines), and \u2013 provided […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[200,201,253],"tags":[],"class_list":["post-8543","post","type-post","status-publish","format-standard","hentry","category-israeli-taxation-en","category-voluntary-disclosure-en","category-binyamin-radomsky-en"],"acf":[],"yoast_head":"\nVoluntary Disclosure procedure announced - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/voluntary-disclosure-procedure-announced\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Voluntary Disclosure procedure announced - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df\" \/>\n<meta property=\"og:description\" content=\"Yesterday (7th September 2014), the Israeli tax authority finally published their long-awaited and anticipated Voluntary Disclosure\u00a0scheme. 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