Voluntary Disclosure and Regulation of Income and Capital
Voluntary Disclosure – reporting of Income, capital, and assets that were not reported to the tax authority in Israel and abroad. Assistance in arranging funds abroad.
Voluntary disclosure is a procedure that begins with an application to the Israel Tax Authority at the taxpayer’s initiative. Unreported capital and income can be reported both from sources in Israel and abroad; criminal immunity would also be obtained. If they accept the request for disclosure, a hearing would be held and finally an assessment agreement would be signed. It is advisable to do this process with the help of an accountant.
The voluntary disclosure procedures were enacted through a temporary order which expired at the end of 2019. Formally, it is not possible to use the same procedure and obtain immunity from criminal proceedings during voluntary disclosure, given that the lack of reporting was not done with malicious intent to avoid paying taxes.
Although this program officially ended in 2019, it is still a possibility to pursue this process. We at Nimrod Yaron have had previous experience helping clients in their affairs with the Israel Tax Authority
Arranging Funds with the Tax Authority
Even after the formal deadline for filing a voluntary disclosure procedure, it is advisable to contact the tax authority proactively and settle the tax liability. This is advised instead of waiting for the tax authority to find out for itself unreported capital and income. International information exchange procedures that take place today (CRS, FATCA) help tax authorities discover capital and income in an easier way than before, so the risk of exposure is much higher. at Nimrod Yaron & co., we regularly accompany procedures for settling debts after examining all the options and performing tax calculations that benefit the client.
Voluntary Disclosure in the United States
The American tax specialists in our firm handle voluntary disclosure in the United States. This includes income in Israel and any other sources in the world that have not been reported to the United States.
Voluntary Disclosure and Reporting of Accounts Abroad
Arranging the funds with the Israel Tax Authority also includes reporting accounts abroad. Recently, the need to disclose unreported funds to the Tax Authority has grown in importance. Considering banks’ requirements for an accountant’s approval of the tax payment and source of funds, connection with the funds must be made before transfers can happen.
Overseas Real Estate Reporting
Our firm specializes in dealing with the regulation of unreported real estate abroad and the tax that has been paid for it (rent tax, capital gains). Nowadays, the exposure is more significant and settling of the matter will protect the taxpayer.