Toshav Hozer Vatik and the OECD
Report|Israel|Tax| Toshav Hozer Vatik
Dr. Avi Nov, Adv.
August, 2012
The Israeli Tax Authority is leading a proposals that would require an Israeli new residents and Toshav Hozer Vatik to disclose their non Israeli source income and gains derived in their first 10 years in Israel.
See also:
Israeli Tax Incentives to Olim: New Rules Proposed
Israeli Taxation of New Immigrants: Proposed Changes
Toshav Hozer Vatik
Under current Israeli tax law, a new residents and Toshav Hozer Vatik are exempt from any Israeli tax liability on their non Israeli source income and gains derived in their first 10 years in Israel. In addition, a new residents and Toshav Hozer Vatik do not need to disclose their non Israeli source income and gains derived in their first 10 years in Israel. The Israeli Tax Authority proposal is intended to deal with criticism from an OECD report, as discussed below.
See also:
Tax benefits to new immigrants and returning residents
Update on Israeli Tax Benefits for Returning Residents and New Immigrants
Summary of tax benefits to new immigrants and returning residents
The OECD report
The Global Forum on Transparency and Exchange of Information for Tax Purposes has released recently peer review reports assessing the tax systems of 13 jurisdictions, including Israel, for information exchange.
According to the report, the legal and regulatory framework in Israel generally ensures that ownership, accounting and banking information is available for all relevant entities and arrangements. However, in a limited number of cases, where a company has issued bearer shares, the owners of these shares may not be identifiable.
The Israeli Tax Authority has broad access powers to obtain requested information for exchange of information purposes under Tax Treaties, including from banks. However, ownership and accounting information may not be available and accessible in respect of certain trusts and new immigrants or returning veterans.
Israel has a considerable network of Tax Treaties that provide for exchange of information in tax matters. Nevertheless, the Israeli competent authority does not have access powers to give effect to agreements which cover only exchange of information (as distinct from double taxation).
Israel’s response to the findings of this report as well as the practical implementation of the international standard will be considered in the Phase 2 review, which is scheduled to commence in the second half of 2013.
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
