The Window of Opportunity for the Voluntary Disclosure Procedure Is Closing
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 provide a genuine opportunity for anyone with previously unreported capital or income – in Israel, abroad, and also in the world of digital assets (crypto) – to report it, pay the required tax, and receive immunity from criminal proceedings, subject to the terms of the procedure.
Eligibility for the benefits offered under the procedure depends on the application being made before the Israel Tax Authority has already received relevant information or opened an examination regarding your affairs. Therefore, even if it appears that there is still time on paper, in practice it is not always advisable to wait until the last minute.
From our experience: if you have unreported assets or capital, you should not rely on the assumption that there is still time, or that there are other taxpayers who have not yet approached the Israel Tax Authority. Sometimes, those who start earlier gain peace of mind, control over the process, and fewer surprises.
Even during the period in which the procedure is available, as time passes, the likelihood increases that the Israel Tax Authority will receive information or identify indications regarding the unreported assets or income. This may happen, for example, through examinations, information cross-checks, third-party reports, or information sources shared among tax authorities worldwide.
In such a case, the application may no longer be considered “voluntary” under the terms of the procedure. It may no longer be possible to file 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.
Key Issues in the Current Procedure
Two key issues arise from the professional discussion surrounding the procedure:
Anonymous track
In previous voluntary disclosure campaigns, it was possible to start the process anonymously and disclose the taxpayer’s identity to the Israel Tax Authority only later, after the tax aspects had been clarified in principle. The current procedure does not include an anonymous track, and anyone entering the process does so in their own name from the outset. Many argue that this is the reason why the pace and volume of filings are lower than the Israel Tax Authority’s expectations. However, we believe that preliminary advice and professional guidance provide taxpayers with the confidence they need.
Anyone who wishes to make preliminary anonymous inquiries and ask about their situation without identifying themselves is welcome to contact us anonymously through secure channels and inquire about arrangements for unreported capital. Our firm is among Israel’s leading firms in filing voluntary disclosure applications, and we can help you conduct an anonymous review before making an official disclosure to the Israel Tax Authority.
Crypto
Anyone who holds crypto gains is aware of the reporting and tax payment obligations to the Israel Tax Authority, which are also required in order to realize the funds and bring them into the banking system.
Even where there is a genuine desire to settle obligations with the Israel Tax Authority, dealing with the banks can make the process intimidating. Requests for documents, questions about the source of funds, and sometimes even refusal to accept the funds cause some people to fear that they will do the right thing – pay tax and declare the gains – but ultimately remain without any real ability to bring the money into their lives and use it.
The current procedure addresses this issue specifically, in order to deal with the difficulty vis-a-vis the banking system and allow funds originating from crypto to be brought in for the purpose of paying the tax.
Is It Worth Starting a Voluntary Disclosure Process Now, Shortly Before the Procedure Ends?
In practice, many voluntary disclosure applications are filed at later stages. People take time to consider their position, gather documents, understand the amounts involved, and only then make a decision. There is a fundamental point that taxpayers must take into account, and most are not aware of it: a 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 proceeding has begun – it may no longer be possible to receive the protections offered by the procedure.
We are now very close to the finish line. Anyone who wishes to come under the umbrella of the current procedure should begin by reviewing their position now, understand whether any exposure exists, and only then choose the strategy and decide how to approach the process.
Waiting without conducting a review can turn a manageable decision into an unnecessary risk – especially as August 2026 approaches.
Risk Indicators: When Should You Stop and Review the Situation Now?
If one or more of the following items sound familiar, it is worth carrying out an early exposure review.
- There is a bank account or brokerage account abroad that was not reported, or was not fully reported, over the years.
- There is income from interest, dividends, rent, or capital gains from abroad that was not included in Israeli tax returns.
- Significant deposits or withdrawals were made without sufficient documentation or a consistent explanation.
- There is crypto activity involving multiple transactions, conversions, or transfers between wallets, without organized reports.
- There are holdings through a foreign entity, such as a company or partnership, or through a more complex structure, such as a trust, without a review of the Israeli reporting obligations.
What Is Required to Carry Out Voluntary Disclosure Properly?
A good process begins with preparatory work. Almost always, we will want to:
- Map all relevant assets, income, and accounts in Israel and abroad;
- Calculate the tax events and exposure for each relevant year;
- Prepare supporting documents: reports, bank movements, documents, transaction history, including digital assets if relevant;
- Review broader implications: tax residency, foreign companies, trusts, dividends, interest, capital gains, and similar matters;
- Build a plan going forward: how to report properly in the future and how to ensure clean ongoing compliance.
How Can We Help?
Nimrod Yaron & Co. specializes in Israeli and international taxation. Our team is composed of professionals with years of experience in senior positions at the Israel Tax Authority, alongside experience in leading firms and law offices, bringing together both legal and economic perspectives.
We advise private and public companies, Israeli and foreign companies, global venture capital funds, and clients seeking focused advice in clear, accessible language.
We also work with a professional network of accounting firms and law firms around the world, allowing us to provide comprehensive support in cross-border cases.
If you have unreported capital, an account abroad, 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 to do so is.
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Questions and Relevant Information
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.
