Following legislation approved by the Knesset by which severe tax offenses will be considered harsh criminal offenses according to the Anti-Money Laundering Law; public response to the voluntary disclosure procedure and its success; and following talks between the Israel Tax Authority and the Ministry of Justice, the Authority announces its decision to extend the deadline for submission of applications, as part of the interim provisions of the procedure, until 31 December 2016.
As agreed with the Ministry of Justice, the extended procedure and interim provisions will also grant immunity from indictment for money laundering offenses in cases in which the criminal activity that establish the offense is the tax offenses to which the procedure applies. In the coming days the Tax Authority will publish an amendment to the procedure.
The voluntary disclosure procedure includes two interim provisions that were extended in order to simplify submission of applications for voluntary disclosure:
1. Submission of anonymous applications – in this track,
applications that do not specify the details of the taxpayer may be submitted at the initial
stage in order to examine the tax liability derived from the application. After clarifying the
expected tax liability, the applicant of course will be required to specify the name of the
taxpayer and full details thereof.
2. Shortened track – if the total capital included in the application does not exceed 2 million NIS
and the taxable income derived from this capital does not exceed 0.5 million NIS, then the
application may be submitted via the shortened track along with the relevant correcting tax
reports. Upon approval of the application, a payment voucher will be issued to the applicant.
Upon timely payment of the voucher, the applicant will receive a notice stating that no criminal
investigation will be conducted regarding the submitted information.
Since its publication on 7 September 2014, a total of 5,131 applications for voluntary disclosure were submitted, of which 3,059 used the anonymous track, 1,088 used the shortened track, and 984 applied via the regular track. In addition, capital valued at 17.5 billion NIS was exposed and which be included in the routine report systems at the Tax Authority. For comparison purposes, note that usually approximately 200 applications for voluntary disclosure are submitted to the Tax Authority per year.
According to the provisions of the procedure, a taxpayer may disclose assets and declare unreported income and pay the tax derived from these assets and incomes, if he meets the terms defined for the procedure. Among these terms is a requirement i that the application be submitted honestly and in good faith and that at the time of the application there is no inquiry or investigation at the Tax Authority regarding the applicant.
In addition, the procedure stipulates that applicants will pay lawful taxes as warranted by the disclosure. The Tax Authority undertakes, with the approval of the State Attorney Office, to refrain from initiating criminal proceedings against the taxpayers that meet the terms of the procedure and pay the entire sum of tax derived from the disclosure procedure.
The applications for voluntary disclosure are submitted by email: firstname.lastname@example.org
to the Deputy General Manager for Investigations and Intelligence.