After months of discussions between the Israel Tax Authority (ITA), the Ministry of Finance, and the Ministry of Justice, it seems that the Israeli Voluntary Disclosure Program (Israeli VDP) will be renewed in January 2018. The new program will be similar to the previous Israeli VDP that commenced on December 31, 2016. In the event that all conditions of the program are met, which includes a voluntary disclosure made out of good faith effort, the taxpayer will be able to disclose the unreported income, and pay the taxes due. In return the ITA, with the approval of the Criminal State Attorney, will not recommend criminal prosecution against these taxpayers.
Although some details of the procedure have not yet been announced, it seems that the new program will include similar provisions that existed under the previous program, i.e., the Anonymous Track and the Fast Track.
The old programs included the following terms:
- The Anonymous Track: this track enabled the taxpayer to come forward anonymously in order to check out the tax liability and upon which the taxpayer had a limited time frame to expose his name and his full details in order to participate in the program.
- The Fast Track: when the total unreported capital included in the voluntary request did not exceed NIS 2,000,000 and the unreported income derived from it did not exceed NIS 500,000, the taxpayer could submit his request using an expedited track, known as the Fast Track, together with his amended returns. It is not yet clear if the same amounts will apply in the new program.
Through the previous program 7,400 voluntary disclosure requests were filed, thus exposing NIS 25 billion, and NIS 3 billion tax was collected.
We anticipate more details of the new program will be released in the upcoming months. Please contact us if you have any questions.
The content of this article is intended to provide a general guide to the subject matter and is not a substitute for legal consultation. Specific legal advice should be sought in accordance with the particular circumstances.