Voluntary Disclosure 2026: Fewer Applications Than Expected, More Questions on the Ground
At the Israel Tax Authority, they note that the number of cases so far is lower than expected, but the window of opportunity under the Voluntary Disclosure Procedure is nearing its end .
The Voluntary Disclosure Procedure, published in August 2025, allows taxpayers to approach the Israel Tax Authority voluntarily until 31.8.26. The procedure is intended to give a real opportunity to anyone with capital or income that was not previously reported – in Israel, abroad, and also in the world of digital assets (crypto) – to report, pay the required tax, and receive immunity from criminal proceedings (subject to the procedure’s conditions).
As of February 2026, the Israel Tax Authority indicated that the pace and volume of filings are below expectations. It is important to understand: low participation is not necessarily “good news” for those who are undecided. It mainly indicates that there are barriers that slow the public’s willingness to come forward. The fact is that the procedure is time-limited, and in certain cases eligibility to benefit from the more favorable terms depends on the application being submitted before the Israel Tax Authority has already received relevant information or opened an examination in your matter. Therefore, even when it seems there is still time on paper, in practice it is not always advisable to wait until the last minute.
From our experience: anyone with unreported assets and capital should not rely on the idea that there is plenty of time or that other taxpayers have not yet approached the Israel Tax Authority. Sometimes, those who start earlier gain peace of mind, more control over the process, and fewer surprises. Even within the procedure’s timeframe, as time passes the likelihood increases that the Israel Tax Authority will receive information or identify indications regarding the unreported assets or income (for example through audits, information matching, third-party reporting, or information sources shared among tax authorities worldwide). In that situation, the application may no longer be considered “voluntary” under the procedure’s conditions. It may no longer be possible to submit an application under the Voluntary Disclosure Procedure, and the exposure may be not only civil (assessments, interest, and penalties) but also exposure to criminal proceedings.
Anonymous? Depends on whom
From the professional discussion around the procedure, two main reasons emerge:
There is no anonymous track
In prior voluntary disclosure campaigns, it was possible to begin a process anonymously and only later, after a preliminary review of the tax aspects, to disclose one’s identity to the Israel Tax Authority. For quite a few taxpayers, anonymity provided reassurance. Under the current procedure, there is no such track. This means that anyone who enters the process does so under their name from the first moment.
Taxpayers are welcome to contact us with an anonymous and confidential inquiry regarding arrangements for unreported capital. Our firm is among Israel’s leading firms in submitting voluntary disclosure processes, and we can help you conduct an anonymous review before any formal disclosure to the Israel Tax Authority.
Crypto
Anyone holding crypto gains is aware of the reporting obligation and the obligation to pay tax to the Israel Tax Authority, so they can deposit the funds into the banking system and use them in day-to-day life. Even where there is a genuine desire to regularize obligations with the Israel Tax Authority, dealing with banks can make the process discouraging. Requests for documents, questions about the source of funds, and sometimes refusal to accept the funds, cause some people to worry that they will do the right thing (pay tax and report gains), but will ultimately be left without a real ability to bring the money into their lives and use it.
Public concerns are understandable, but from the Israel Tax Authority’s perspective, emotion does not exempt anyone from reporting or from paying tax .
Should you wait until the end of the procedure to start a voluntary disclosure process?
In practice, many voluntary disclosure applications are submitted at later stages. People take time, gather documents, understand the amounts, and only then decide. There is a fundamental point taxpayers must consider, and most are not aware of it: the voluntary disclosure process works only as long as it is truly “voluntary.” In other words, if the Israel Tax Authority has already received information about the taxpayer, if an examination has been opened, or if another process has begun, it may no longer be possible to obtain the protections the procedure offers.
It is more appropriate to begin with an early status review, understand whether there is exposure, and only then choose the strategy and timing. Waiting without conducting a review can turn a convenient decision into an unnecessary risk – especially as August 2026 approaches.
Risk indicators: when it is worth pausing and checking now
If one or more of the following items sound familiar, it is worth conducting an early exposure review.
- There is a foreign bank account or foreign brokerage account that was not reported (or not fully reported) over the years.
- There is income from interest, dividends, rent, or foreign capital gains that was not included in Israeli returns.
- Significant deposits or withdrawals were made without sufficient documentation or a consistent explanation.
- There is crypto activity involving many transactions/conversions/transfers between wallets, without organized reports.
- There are holdings through a foreign entity (company/partnership) or a more complex structure (for example, a trust), without reviewing the reporting in Israel.
What is required to carry out voluntary disclosure in a smart way?
A good process starts with preparation work. In almost all cases, we will want to:
- Map all relevant assets, income, and accounts (Israel and abroad)
- Calculate the tax events and exposure for each relevant year
- Prepare supporting documentation: reports, bank activity, documents, transaction history (including digital assets, if relevant)
- Review broader implications: tax residency, foreign companies, trusts, dividends, interest, capital gains, and the like
- Build a plan going forward: how to report properly going forward and how to ensure clean conduct in day-to-day practice as well
How can we help?
Nimrod Yaron & Co. specializes in Israeli and international taxation. Our team is made up of professionals with years of experience at the Israel Tax Authority, along with experience at leading firms and law offices, and brings a combination of legal and economic perspective.
We advise private and public companies, Israeli and foreign, global venture capital funds, and also clients seeking focused advice in clear, plain language. We also work with a professional network of accounting firms and law offices around the world, in order to provide a full solution in cross-border cases.
If you have unreported capital, a foreign account, international activity, or gains from digital assets that have not been regularized, an early exposure review can clarify whether you can still enter the Voluntary Disclosure Procedure and what the right way is to do so.
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FAQ
Does voluntary disclosure really grant criminal immunity?
Yes, subject to the procedure’s conditions and timely filing before any examination, investigation, or relevant information exists.
I don’t have cash, only a foreign investment account that was not reported - is this still relevant?
Yes. The procedure applies to foreign accounts, investments, and related income, including residency-related non-reporting situations.
What happens if the Israel Tax Authority has already contacted me?
It depends. A general inquiry may not block the process but seek immediate advice before responding.
I have crypto gains - if the bank will not accept the money, do I still have to report and pay tax?
Yes. Reporting and tax payment are required even if deposit is difficult; proper documentation can help.
How long does a voluntary disclosure process take?
It varies by years, sources, complexity, and documentation; starting early helps with gathering materials.
