Proposed Tax Changes for 2016
Israel|Tax Authority|New Immigrants|Senior Returning Residents
Dr. Avi Nov, Adv.
The Israel Ministry of Finance distributed recently a draft of the Economic Arrangements Law for 2016, which includes amendments to the tax law. These new amendments will empower the Israeli Tax Authority and provide it with various tools to fight tax avoidance practices and aggressive tax planning. The draft of the Economic Arrangements Law provides, inter alia, that:
(1) Taxpayers will need to file reports with the Israeli Tax Authority when they have applied, or relied on, professional written tax advice, such as legal opinions, as well as the nature of the advice or opinion;
(2) Israeli banks as well as other financial institutions such as insurance companies will provide the Israeli Tax Authority with information regarding financial transactions of their business clients on a regular basis. The Israeli Tax Authority will be authorized to request additional information from the financial institutions regarding their clients.
(3) The Prohibition on Money Laundering Law will be amended in such a wat that tax offences will become an offence under the Prohibition on Money Laundering Law. If this amendment becomes law, the Israeli Tax Authority will be able to file a criminal suit against tax evaders also under the Prohibition on Money Laundering Law.
(4) The statute of limitations on fiscal inspections of tax returns by the Israeli Tax Authority will be extended to a 4-year period instead of the current 3 years.
(5) In order to comply with standards by the Global Forum on Transparency and Exchange of Information for Tax Purposes, the Israeli Tax Authority will be able to request tax reports and other information from the following:
(5.1) New Immigrants and Senior Returning Residents;
(5.2) Companies controlled by such New Immigrants and Senior Returning Residents;
(5.3) Trusts with New Immigrants and Senior Returning Residents settlors or beneficiaries.
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