Last week, Switzerland announced they would petition the Israel Tax Authority to provide information on prominent Israeli businessmen’s’ assets in Switzerland. This decision came after a February announcement to over 100 Israelis and 150 related companies that Israel had requested specific information to assist the Tax Authority in tax collection proceedings.
Under Swiss law, anyone who came up to the Swiss Tax Authority (AFC) had the right to attend a hearing on their case and they could advocate on their own behalf. Now, the time allotted to the Swiss Tax Authority has shortened. The current rule is that anyone who opposes the decision can appeal it to the federal court in Bern within 30 days.
Specifically, the Israel Tax Authority asked the Swiss for information on companies operating in tax havens such as the Virgin Islands, Mauritius, Panama, and Liechtenstein. The Tax Authority inquired about the late industrialist Michael Strauss and his sister Raya Strauss Ben-Dror. Some other powerful Israelis that came up were the late industrialist Avraham Livnat and his son Shai Livnat, the three children of businessman Doron Ofer, the son of late billionaire Yuli Ofer, Benny Steinmetz, Olga Leviev, and Lev Leviev.
The Israel Tax Authority also requested information about the former chairman of Bank Hapoalim, Shlomo Nehama, and other powerful executives. The list includes requests for information on dozens of less powerful Israelis such as accountants, lawyers, writers, and musicians.
The information requested by the Israel Tax Authority depends on an exchange of information agreement signed by Israel and Switzerland. The Swiss Tax Authority has a plethora of information that the Israel Tax Authority believes can assist in collecting tax from Israelis. The information consists of reports from banks in the country, asset records, and capital statements.
Some of the names and accounts the Israel Tax Authority was inquiring about also ended up appearing in the HSBC accounts list that was leaked to the investigative journalist organization ICIJ. Parts of this were also published in the Haaretz newspaper.
Comparisons between the February list and the current one published by the Swiss Tax Authority reveal that some of the companies of Israeli businessmen are not in the updated documents. Among those that are not included are: the brothers Raya and Michael Strauss, Olga Leviev, and Steinmetz.
This proves that some Israelis and Israeli companies have applied to the Swiss Tax Authority not to have their information transferred to the Israel Tax Authority. It is not known what the final decision of the Swiss Tax Authority was; nobody knows whether the Swiss passed on the information or not. According to Swiss journalists the publication of the second list is a final call to anyone who has not yet utilized their right to prevent transferring information. It lets them know that they have the option to do so.
The 150 Form
Israeli residents must report a holding in a foreign company in the appendix to the annual report. The reporting obligation is covered by section 130 and regulation and within those regulations, form 150 reporting is also a requirement.
To read more about the 150-form article, click here.
Nimrod Yaron
We are Nimrod Yaron & Co, an Israeli international tax law firm. We are experts in dealing with the Israel Tax Authority and have lots of experience assisting customers with voluntary disclosures.
