Release of Information to Foreign Tax Authorities  

Two pending amendments to Israeli tax legislation will, if adopted, permit the exchange of information about taxpayers in a multinational context. The passing of these amendments will also allow for implementation of multilateral agreements for ‘exchange of information’ regarding individuals and corporate tax payers. In addition, a recent change in the Law on Prohibition of Money Laundering (2000), subjects legal and accounting professionals to  a number of KYC (‘Know Your Client’) requirements from now on.  

Revised Tax Amnesty Arrangement Published and Now in Effect

On 7 September 2014, the Israeli Tax Authorities issued a new general voluntary disclosure arrangement, effective until 31 December 2016. The new procedure also covers indirect taxes (VAT, import duties, and real property transfer taxes). Anonymous applications may be submitted until 6 September 2015 as part of a transitional package that has been put in effect. In such a case the taxpayer’s identity is disclosed only upon approval of the application. This transitional procedure includes an expedited track for ‘modest taxpayers’, having an unreported capital of up to NIS 2 million and a taxable income of less than 0.5 million NIS.  It is not possible to file an application anonymously for this simplified procedure. Losses, exclusively incurred during the tax years of the disclosure, may be offset. It has been announced that this amnesty shall be the last clemency offered.