Published On: Sat, Jun 14th, 2014

Israeli Tax Authority targets foreign bank account holders

The Tax Authority has been handed information about thousands of Israelis with foreign accounts.

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“The Tax Authority has a list of Israelis with foreign bank accounts with tens of billions of shekels. They can expect to receive registered letters from the Tax Authority. Figures will be published soon about investigations that will be opened against some of the tens of thousands of Israelis whose names have been made known to the Tax Authority through various leaks. We’re talking about turnovers of billions of euros, ” Tax Authority senior deputy director general for investigations and intelligence Avi Arditi told the panel on black capital at the Institute of CPAs in Israel conference in Eilat on Wednesday.

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As for the Tax Authority’s capabilities in uncovering Israelis’ money overseas, Arditi said, “In the past it was taboo to talk about people with a foreign bank account. No one knew about it and the chances that the Tax Authority would receive information about it was zero. But things have changed. Countries have grasped the need to share information, and banks are now required to examine the sources of their customers’ money. We’re in a new era, in which information flows into Israel from abroad, and we know how to deal with sources in Israel that provide us material. This is something new and interesting, and tax cheats should realize it.”

Arditi added, “The Tax Authority has become much stronger in recent years. For example, in all matters related to organized crime, we know how to create deterrence. A large part of organized crime now fear the Tax Authority more than they fear other law enforcement agencies.

“The Diamond Unit has become a key tool in the fight against organized crime. It and other investigative units, including the fictitious bank accounts unit, have discovered a lot of black capital. The Tax Authority discovers criminal actions totaled NIS 4-5 billion a year. That’s a drop in the ocean, but it is thanks to the work of the investigative units.”

Arditi said that more than 2, 000 cases are opened annually against taxpayers on technical issues, such as late filing of reports and incorrect filings, and that an additional 1, 000 cases are opened on tax evasion and serious crimes, amounting to several billion shekels. “I estimate that we issue 300-400 indictments a year, and many cases are closed with fines, ” he said.

State Comptroller Joseph Shapira called for the Tax Authority to be reinforced in order to fight against black capital. “We must roll up our sleeves to fight black capital. The Tax Authority generates money for the state. It collects NIS 232 billion a year, so why is it not possible to give it a few million to expand its workforce? It’s an agency that brings us so much money, but the government is not prepared to invest a bit more in manpower, ” he said.

Shapira said that general tax filing by all Israelis, including salaried employees, should be instituted, in which they list their income and expenditures each year.

Published by Globes [online], Israel business news – 

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