Further to our circulars of September 6, and September 24, 2015, we would like to inform you that the Head of the Israeli Tax Authority, Mr. Moshe Asher, made an announcement yesterday at the annual STEP Conference in Israel regarding the expiration date for the Temporary Voluntary Disclosure Procedure in Israel. The expiration date, which was originally scheduled to be September 7, 2015 and then subsequently extended to June 30, 2016, has now been further extended until December 31, 2016.
The ITA has decided to extend the above deadline further to the enactment of a new law in Israel which determines that certain tax offences will be considered as Money Laundering offences. The purpose of the extension is to provide taxpayers with additional period of time to settle their matters with the ITA before this new law becomes effective.
As a result of this extension, taxpayers can still submit applications for a voluntary disclosure procedure under the anonymous route, as well as the shortened route, as specified below.
As a reminder –
As we informed you in our previous circulars, on September 7, 2014, the Israeli Tax Authority published a Temporary Voluntary Disclosure Procedure. This procedure has had a significant success until today and almost 5,000 applications were submitted to the ITA. In summary, the Temporary Procedure enables taxpayers to apply for a voluntary disclosure procedure in two main ways which made the application more favorable to the taxpayer:
- The Anonymous Route. This route enables the submission of anonymous applications, without disclosing the details of the taxpayer to the tax authorities. After the conclusion of the negotiations regarding the tax liability, the name and details of the taxpayer are provided to the tax authorities.
- The Shortened Route. In cases where the capital included in the voluntary disclosure application does not exceed the sum of NIS 2,000,000 and the taxable income derives from such capital does not exceed NIS 500,000 in the relevant tax years, the voluntary disclosure application can be submitted by way of a shortened route. This route enables a submission of amended tax returns for the relevant years.