Tax Authority sets sights on Israelis’ accounts in Germany
As part of its war against unreported capital, the Israel Tax Authority recently obtained a list of particulars of hundreds of banks accounts owned by Israelis in banks in Germany, sources inform Globes.
The Tax Authority is now processing the information in order to find account owners who have not reported the money held in the accounts and their income from it. Sources also inform Globes that the list of Israelis obtained contains personal information, account printouts and numbers, the amount of money held by every account owner, and other particulars. The list contains accounts with various amounts of money, from hundreds of millions of euros to a few million. On the basis of these amounts, it can be assumed that the list will reveal names of prominent Israeli business people and wealthy individuals.
The Tax Authority is now examining the “German list” for the purpose of detecting tax evaders. In the first stage, the authority will examine and sort the material, and compare it with reports by those Israelis to the tax authorities and the information in its databases. The document selection process will detect which of the customers reported the accounts in Germany in their dealings with the Tax Authority and which reported the accounts in the framework of the voluntary disclosure proceeding allowed by the Tax Authority until the end of 2016 without risking criminal proceedings.
Leaks and official exchanges of information
Holding an overseas bank account is neither a tax violation nor any other kind of violation, but there is a duty to report such a holding, and not all Israelis with overseas activities fulfill this duty.
Israeli citizens are legally entitled to keep overseas bank accounts, but they must report their accounts and the income produced by them, including income from interest, dividends and capital gains, to the Tax Authority. The German list is one more in a series of lists of Israelis keeping overseas bank accounts obtained by the Tax Authority in recent years. The best known of these lists is the list of customers of UBS Switzerland, the exposure of which led to the investigation of dozens of customers who did not report accounts, and the filing of a number of indictments. Other lists obtained by the Tax Authority include one of secret accounts at HSBC Switzerland and the Panama documents.
The German list was obtained in the framework of cooperation and exchanges of information between the Israel Tax Authority and authorities in the Federal Republic. This is a continuation of Tax Authority head Moshe Asher’s declared policy of looking for lists of Israelis with unreported overseas money as part of the authority’s war against unreported capital. It involves both “unofficial” lists leaked by employees of the overseas banks and official exchanges of information between countries. Asher recently stated at a conference, “The Tax Authority is very busy collecting information about Israeli money around the world by obtaining lists: UBS, Panama and others. We have begun exchanging information with the US, and starting next year, we will exchange information with over 90 countries. Loopholes are being closed worldwide; that’s the trend. We will get to everybody.”
Renewal of voluntary disclosure
The Tax Authority has also been taking action in recent months to renew the voluntary disclosure proceeding enabling Israelis to report their unreported capital and pay tax on it without facing criminal charges. In the course of the proceeding that ended on December 31, 2016, NIS 25 billion in undetected funds was exposed in 7,400 voluntary disclosure requests, on which NIS 3b. in taxes was collected.