Voluntary disclosure – FAQs:


Q: Why was the voluntary disclosure procedure initiated?

A: The Tax Authority wishes to motivate taxpayers, licensed dealers, individuals and attorneys in corporations who have committed offenses under Israeli tax law to amend their tax reports.

Q: I am a salaried worker who has never submitted a financial report, and I have money in a foreign bank. Is this a problem?

A: Yes. All individuals in the State of Israel, even a salaried worker who has never filed a report, must submit a report and pay tax on foreign assets and income.

Q: I have money abroad that I received as an inheritance. Is this a problem?

A: Yes. A resident of Israel must report bank accounts, funds and assets abroad. In addition to the report, payment of tax in Israel is mandatory, for instance in cases of interest, dividends and the like accumulated on foreign  – In addition, you must disclose the source of the funds, and prove that they were indeed received as inheritance. Unless proven as inheritance, the earnings will be considered by the Tax Authority as such that was acquired through capital earnings or income from work abroad, and therefore subject to significant taxation rates.

Q: What is the advantage of the voluntary disclosure procedure?

A: Failure to report is a criminal offense punishable by incarceration. The Tax Authority, in collaboration with the State Attorney, is willing to forego criminal proceedings against anyone who performs a voluntary disclosure procedure, and report their assets and income, subject to the terms published.

Q: I have money in bank accounts in Germany, France, Denmark and India. Do I have to report the accounts in all of these countries?

A: Yes. The duty to report and pay tax in Israel applies to Israeli residents with funds and properties worldwide.

Q: I read that immunity from criminal proceedings is applicable after 7 years. Does this apply to voluntary disclosure?

A: No. Anyone committing a tax offense and withholding information is not entitled to immunity from criminal proceedings.

For additional details, please contact (discretion assured):

Yaniv Angel: yaniv@auren.co.il