Voluntary discovery proceedings

In recent years the Israel Tax Authority has requested to promote arrangements and agreements with respect to unreported foreign bank accounts and assets.

Many Israelis hold bank accounts and additional assets abroad. Income from these accounts and assets may be subject to tax in Israel. As part of the efforts to increase enforcement of tax collection for many funds and assets held mainly abroad, the Israel Tax Authority works to increase enforcement through improving the possibilities of international information exchange on the one hand, and on the other hand through offering lenient tax arrangements in the context of voluntary discovery proceedings, which provide for immunity from criminal prosecution concurrent with regulating civil tax liability.
Many of the cases evoke complex questions regarding civil tax liability arising from activity abroad, including questions pertaining to the source of the assets abroad, the date the income was formed, and the extent of liability of the specific taxpayer seeking to settle the matter. Unique arrangements were executed in the diamond industry.
Within the framework of the temporary order published by the Israel Tax Authority, the firm acted on dozens of cases before the various assessing officers, including arrangements in the diamond industry conducted at the Assessing Officer for the Central District, while striving to obtain immunity from criminal prosecution and at the same time reaching agreements regarding civil tax liability.