Israeli Tax Authority Hunts Undeclared Income  

Tax Evasion| Value Added Taxes| Tax Authorities 

Dr. Avi Nov, Adv.

July 2014

The Israeli Tax Authority warned recently Israelis who hold undeclared assets abroad, especially bank accounts. The Israeli Tax Authority plans various actions, as described below, which will enable its tax assessors to put their hands on Israelis who hide assets abroad. 

Exchange of Information

The Israeli Tax Authority proposed changes to amend the Income Tax Ordinance, by adding a chapter on the exchange of information under international conventions. According the new bill, the Israel Tax Authority will share information with tax authorities of other countries, including tax havens. 

See also:

Israel will Receive Information from Tax Havens

Tax Havens are Attractive for Israelis 

Lists of bank account holders

The Israeli Tax Authority has received lists with names of many thousands of Israelis who have bank accounts, primarily in Switzerland. According to data held by The Israeli Tax Authority there are tens of billions of dollars’ worth of Israeli undiclared capital abroad. 

Intelligence and Investigation

The Israeli Tax Authority received recently lists of many Israelis who hold undeclared bank accounts in Europe. These lists are now analyzed by the Tax Authority’s intelligence and investigation unit. The Israeli Tax Authority is expected to act against those Israelis who hold undeclared bank accounts and failed to take part in the voluntary disclosure procedure. 

Form 5329
Approximately 95,000 Israelis have received Form 5329 from the Israeli Tax Authority. What is Form 5329? Its title is "Report of Personal Details and Declaration of Sources of Income in Israel and Abroad. Form 5329 is usually in use for the opening a self-employed file or withholding tax file. 

Yet, the Form 5329 that was sent recently to many Israelis had a different purpose. It was intended to find people that may have undeclared bank accounts or assets in Israeli or abroad.

Dr. Avi Nov Law Offices, Israeli & international tax law 
*This article is intended for informative purposes only and is in no way to be construed as tax advice or a legal opinion

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