Lior Pick, Adv, CPA (Isr.), TEP

About a month ago, we published the second article about the possibility given to Israeli residents who hold assets overseas which were not declared so far, to make “voluntary disclosure”, which would give immunity from turning those cases to criminal proceedings.

However, this option was a little problematic. Indeed, this procedure had an important inconvenient which bothered the taxpayers: the taxpayer, in the first request given to the tax authorities, had to disclose all his details including name, address, bank details etc.

Consequently, the ITA (Israeli Tax Authority) took yesterday important measures to achieve the exposure of the property and funds held by the Israelis out of Israel and not declared yet.

Today, June 26, 2012, the ITA has extended the deadline for requesting to join the Tax Amnesty regarding the disclosing of undeclared Income received from property outside of Israel, from June 30th, 2012 until September 27th, 2012.

Therefore, Israeli residents who have failed to report their income from assets outside of Israel may disclose that income and assets to the ITA according to a special process, until September 27th, 2012, and enjoy immunity from criminal liability and penalties.

Moreover, according to the new clarification of today, the ITA is now allowing until September 27th, 2012, a special anonymous request/ declaration on the amount of Income and assets to follow the voluntary disclosure.

This new clarification is very favorable because in a case that the Israeli tax authorities refuse to accept the request of voluntary disclosure, or if the tax authorities propose the taxpayer to pay an unreasonable amount of tax, the taxpayer can decide not to do this voluntary disclosure and not to give any details to the tax authorities.

For all the Israeli taxpayers who had undeclared income/ assets (including undeclared bank accounts) from overseas, it seems to be the best opportunity for anonymous voluntary disclosure.

We will be more than happy to assist with this procedure.

The aforementioned contains nothing to serve as an opinion and/or an alternative to individual legal taxation advice. We will be happy to be at your disposal for any queries and or explanations regarding this or any general matter. Our office specializes in taxation advice (income tax, betterment tax, VAT) and also accompanies real estate, company and international transactions.

Yours sincerely,

Lior Pick & Co. Legal Offices