Concealing Israeli identity
Israelis and Diaspora Jews have known for years that Dubai is a tax haven, and some of them have concealed money there. However, bank disclosure requirements on customers’ sources of money have caused some Israelis to build complex corporate structures that blur their Israeli identity in order to deposit money in the emirate.
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This is how it works: an Israeli seeking to transfer his money from a European bank to a Dubai bank that keeps confidentiality creates a complex corporate structure that hides his tracks as an Israeli. He then closes his account at the European bank that is no longer bound by complete confidentiality.
Bar-Zakay cautions that there is a fundamental flaw in this tax tip. “A person investing capital in Dubai may rely on the fact that it does not have a tax treaty with Israel, but I would attach little importance to this so-called advantage in the contemporary world. People should realize that the old world have given place to a new world. There is old school and new school, and this is an emerging process. The concealment business has gone bankrupt, and anyone who doesn’t understand this is missing an opportunity to end this story eligantly, ” he says.
“Until recently, people closed accounts and fled to Singapore, and then Singapore began exchanging information. They then fled to Hong Kong, and it too opened up. Now it is Dubai, and it is a really bad idea. First of all, this only postpones the problem, but does not solve it, and may even worsen it, because transferring money to Dubai implies criminal intent of concealment.
“Secondly, there is a real possibility that people won’t see their money again. Thirdly, anyone who closes an account puts a bulls-eye on his back. Closing an account is the best way to ensure that tax authorities around the world will become interested in you.”
