Yesterday, the Attorney General approved the rollout of a new voluntary disclosure procedure that will allow Israelis who have previously hidden assets from the government to file a return and pay the taxes they owe without fear of criminal prosecution. The practice is particularly relevant for those dealing in cryptocurrencies, who have difficulty in regularizing their profits from a reporting and taxation point of view, Israel Tax Authority Director Shay Aharonovitch announced today at the Israel Democratic Institute’s Eli Hurwitz conference. Economy and Society.
„As far as we’re concerned, this process is primarily for holders of cryptocurrencies, who have been in a difficult position in recent years on the disclosure issue,” Ahronovich said. „Now, with the practice of the Bank of Israel (allowing cryptocurrency to be deposited into the banking system, under certain conditions, E. LW.) I hope to make it possible to reveal and bring beautiful. amount to the State of Israel in the next eighteen months.”
Aharonovitch said the voluntary disclosure procedure would remain in place until the end of 2025, but said it would be the last and thus the final opportunity for Israelis who fail to report assets and income to do so with reduced penalties and protection. Criminal case.
„One of the conditions set by the attorney general is that this is the last time voluntary disclosure is made, and we will abide by that,” Ahronovich said. „We will introduce legislation to penalize late filers and that will be the norm here.”
One of the main problems of cryptocurrency players is that in many cases commercial banks in Israel do not accept money from virtual currencies because of the difficulty in tracing the source of the money and the fear of being linked to money laundering. or the financing of terrorism. In such cases, the disclaimer will also apply to taxes on realization of virtual currencies.
The practice of cryptocurrency players paying taxes directly to the tax authority even on money that banks refuse to accept was recently unveiled. With the rollout of the new voluntary disclosure procedure, previously unreported profits will now be brought to the notice of the tax authorities and taxes paid on them.
The tax authority collected NIS 153 million in a voluntary disclosure program that ended in 2019, and NIS 3.5 billion in a program that was in place between 2014 and 2016. Under current practice, it expects to collect NIS 2-3 billion.
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Aharonovitch also talked about passing legislation to give tech investors more certainty in taxation.
„The entire administration of the Ministry of Finance and the Israel Tax Authority, together with Chief Economist and Budget Commissioner Yokaev Gradus, will present to the Minister and Director General a comprehensive plan to create high-tech and certainty for investors.” Aharonovitch said, „The finance minister has to consider Pillar two („Universal Minimum Tax”) – whether it applies, and if so when and how it applies.
„We intend to reassure international companies investing in Israel about transfer pricing, a matter of great concern. We will be firm in the intellectual property valuation of technology companies and allow flexibility in structural changes to facilitate restructuring. When the value of restructuring companies exceeds what the law allows, a We will provide assurance of permanent establishment of international company to invest here without any fear of taxation here.
„All this will lead to higher tax collections in the coming years and the growth of expenditures in the 2025-2026 budget due to the defense budget, which should lead us to deal with what worries us and at the same time provide certainty. So that investors will not only be here, but we also see one of the main roles of the taxation system in Israel. .
Posted on May 21, 2024 by Globes, Israel Business News – en.globes.co.il.
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