Israel’s tax laws determine that the country's residents are obligated to report their income and assets in Israel and abroad since 2003.
Therefore, all Israeli residents are obligated to report any bank accounts, financial inheritance, stocks, and real estate profits to the Israeli Tax Authority. Failure to do so results in a criminal tax offense.
Voluntary disclosure procedure: Individuals that have failed to report their assets by law are able to apply for Voluntary disclosure to settle their tax obligations and receive immunity from legal proceedings against them.
Voluntary disclosure procedure ended in December, 2019.
Currently, the Israeli Tax Authority enables individuals to settle civil report failures, but no longer provides the option of criminal immunity.
On December 12, 2017, the Israeli Tax Authority published a temporary order concerning requests for voluntary disclosure with an option for anonymous declaration route, which will remain in effect until the end of this year- December 31, 2018. The voluntary disclosure will be available as open procedure till December 31, 2019. Afterward, there will be consecutions for not declaring on time.
Under Israeli tax laws, new and returning residents are entitled to tax benefits. Individuals who have been living abroad for more than six consecutive years as "foreign residents" are likely to be considered "returning residents” and can benefit from tax exemptions for five years from the date of return to Israel unless otherwise requested, according to the Israeli Income Tax Ordinance.
Gidi Bar Zakay Consultants specializes in regulating individuals' residency for tax purposes. The firm represents individuals and their families to obtain a new or returning resident status from the Israeli Tax Authority.
The tax withholding tax is a duty imposed by law to the payer of the income rather than to the recipient of the income.
The obligation stipulates that the payer must deduct tax from the payment to the payee, and transfer the deduction to the authority due to the payee's tax liability unless prior approval for the payee has been received due to exemptions. Accordingly, effective tools have been established that allow the tax assessor to use their authority and reduce the fixed deduction rate, and possibly even exempt it, if the assessor is convinced that a tax surplus will be left.
Obtaining approval from Israel Tax Authority approval for the tax withholding rate prior to payment execution will prevent any friction and unnecessary intervention of the Tax Authority down the road, and in some cases, prevent unnecessary filing of reports by foreign companies in Israel. The approval can guarantee a low tax payment and sometimes even full tax exemption in Israel. In many cases the effect is often the same as the Pre-ruling.
For many years, the firm has specialized in handling, advising, and representing the Tax Authority ensuring proper treatment during regular reporting, the handling of complex cases, failures of reporting, managing disputes with the authority, voluntary disclosure, and establishing a reporting format.
We specialize in drafting agreements to regulate the status of the firm's clients in a way that ensures fiscal certainty, the issuance of approvals and pre-rolling, and more. Over the past year, we have gained extensive experience performing intensive fieldwork for our digital currency clients' portfolios. We are adept at handling issues that arise from investing and selling digital assets, such as Bitcoin, and Ethereum as well as due to activity and investment within the ICO by the investor and the issuer, as well as providers of services that are rewarded in the activities of currencies and tokens.
Taxes and digital assets field is still in its infancy but is rapidly growing. We operate on a day-to-day basis and update our knowledge and treatment according to developments, allowing our clients to operate accurately and effectively, and of course avoid mistakes in various circumstances.
Trust taxation is one of the most important issues in international taxation. Taxation of trusts separates the formal ownership, the possession, and the property from the economic benefit it derives. This separation raises taxation questions which are critical, as the separation between ownership or possession of the property and its economic benefits crosses two or more states.
Our firm assists international companies in their activities both in and outside of Israel. We assist our clients in the planning and construction of international tax structures, complex international transactions, tax treaties, tax havens, discussions with tax authorities, and obtaining various approvals such as withholding tax deductions and preliminary decisions. Our office has performed numerous collaborations with top-notch tax experts around the world, enabling us to assist with a wide range of issues to quickly and accurately resolve issues for our clients.