September 6, 2015

As part of the increasing efforts of the Israeli Tax Authorities (“ITA”) to detect tax evaders and to expose unreported worldwide income of Israeli tax residents, the ITA published in September 2014  a New Voluntary Disclosure Program (“Program”). Under the Program, which is in place until the end of 2016, the taxpayer can disclose the unreported income and pay the taxes and limited penalties due and thus avoid severe civil and criminal penalties.

In addition, and as part of the Program two temporary provisions were added under which applications were to be submitted until September 6, 2015:

1. An Anonymous Track- this track enables the taxpayer to come forward anonymously in order to check out the tax liability and upon which the taxpayer has a limited time frame to expose his name and his full details in order to participate in the Program.
2. A Fast Track-when the total unreported capital included in the voluntary request does not exceed NIS 2,000,000 and the unreported income derived from it does not exceed NIS 500,000, the taxpayer can submit his request using this “Fast Track” together with his amended returns. If the request is approved, the taxpayer will receive a payment voucher. Once this voucher is fully paid by the time indicated on it, the taxpayer will receive notification stating that no criminal investigation will be opened regarding the information he had disclosed.  

As expected, the ITA announced today that the September 6, 2015 deadline for these two provisions has been extended, the new deadline yet to be published.