Israel’s Tax chief to meet Swiss bank heads

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Moshe Asher is seeking information about accounts in Switzerland belonging to Israelis.

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/By Chen Ma’anit and Ela Levy-Weinrib/

The Israel Tax Authority is stepping up it efforts to combat overseas tax shelters for Israelis. Sources inform “Globes” that Israel Tax Authority director Moshe Asher is expected to travel to Switzerland next week in order to meet with the heads of Swiss banks that manage huge amounts of capital for Israelis. He is seeking information about accounts in Switzerland belonging to Israelis to order to collect tax on them. This unusual step is part of the war against illegal capital.

The Tax Authority said, “Tax Authority director Moshe Asher will attend the annual conference of tax authority directors next week in Ireland. During his visit, Asher has also scheduled additional meetings in Switzerland.”

As reported exclusively in “Globes, ” the Tax Authority is currently conducting a broad international investigation originating from data it obtained about Israelis keeping accounts and money overseas, among other locations in Switzerland. A month ago, following the publication of a new Tax Authority voluntary disclosure procedure, Asher said that anyone not taking advantage of the procedure and caught by the Tax Authority would be severely punished. “We have lists with thousands of Israelis. Before we get you – and we have a great deal of motivation, indications, and possibilities of obtaining your information – and prosecute you with the full severity of the law, I suggest you come and report the capital and pay taxes. That way, we can even lower taxes in the future, ” Asher said at the time.

It is believed that the Tax Authority director plans to present the Authority’s voluntary disclosure program to the Swiss bankers, and to inform them of the steps being taken in the war against illegal capital, in order to provide them with tools to encourage their Israeli clients to choose voluntary disclosure before it is too late. The bankers themselves have already chosen sides, and are currently acting, each in his own way, to refer their clients to voluntary disclosure processes, and to report according to the legal provisions in their countries of residence.

Estimates: $ 13.5 – $18.5 billion

Some tax experts predict that Asher’s trip to Switzerland will upgrade Israel’s war against illegal capital, and have a significant effect on reducing the dimension of unreported capital, which according to unofficial estimates totals $ 13.5 – $18.5  billion. No Tax Authority director has taken such action before. However, the international mood in favor of combatting illegitimate tax planning and tax shelters, and the array of international agreements under OECD supervision have led to a situation in which information that was secret and confidential for a long time will be included in routine exchanges of information between countries.

In addition, Asher recently proposed legislation in which bankers in Israel will disclose to the Tax Authority information about Jews not resident in Israel around the world having bank accounts in Israel. Under this proposal, the Tax Authority will disclose the information to foreign authorities, and receive from them information they have collected about Israelis holding overseas accounts.

Israelis with capital in Switzerland who have not yet arranged their affairs with the Tax Authority, or who have not yet chosen a new tax shelter, are becoming anxious that Asher’s visit will expose them. Various tax experts say that in view of Asher’s upcoming visit, they have received telephone calls from anxious clients wanting to know whether the Swiss bankers will already disclose the information about them to the Israel Tax Authority.

Published by Globes [online], Israel business news – www.globes-online.com