The Tax Authorities are interested in encouraging tax-payers, dealers, individuals and functionaries in enterprises of whom violated the tax laws, to correct their reports and to report righteousness in data. For the purpose of this, the Tax Authorities, in coordination with the State Attorney, are hereby willing to be obligated not to undertake action of criminal prosecution against those of whom will file for Voluntary Disclosure according to the conditions as specified below (Hereinafter: the “Procedure”).
This Procedure will apply on tax offences as specified in Appendix A’ attached hereinto to this Procedure.
B. CONDITIONS FOR THE VOLUNTARY DISCLOSURE PROCEDURE
1) The Voluntary Disclosure will be honest and completely and in good faith only.
2) At the date of filing for a Voluntary Disclosure to the Tax Authorities, no simultaneous or subsequent investigation or audit by the tax authorities occurred.
According to the clause above “investigation and audit” – includes the partner of the applicant and any companies under their control.
3) At the date of filing for a Voluntary Disclosure, no information concerning the matter of the Voluntary Disclosure is in possession of the Tax Authorities, including concerning the partner of the applicant and any companies under their control.
4) At the date of filing for a Voluntary Disclosure to the Tax Authorities, no simultaneous or subsequent investigation or audit by the Israeli Police Authorities concerning the case of the applicant, his/her partner or companies under their control occurred, and this all in connection with the case of the Request for the Voluntary Disclosure of the Applicant, including any business activities, or any other activities of which could yield income.
5) The Tax Authorities are authorized not to approve the Request for Voluntary Disclosure, in case any information connected to the Request for Voluntary Disclosure exists directly or indirectly, including his/her partner or companies under their control and including any files the Applicant is a party to, according to the following places: any other governmental authorities; by communications media; process of court or protocols or any other documentation at civil or criminal procedures of which are being conducted by a judgmental court in Israel or abroad.
a) Concerning exceptional cases, in which extraordinary personal circumstances occur (for example malignant disease), the Tax Authorities are authorized to approve a Request for Voluntary Disclosure, even if information exists as mentioned above in Clause 3 or an investigation or audit conduction as mentioned above in Clauses 2 and 4.
b) Concerning exceptional cases and because of special reasons of which will be recorded, in case the information, the investigation, or the investigation as mentioned above in Clause 2-4, refer to one company out of many companies under the control of the Applicant and in case no such connection exists, directly or indirectly, between the information, the audit, the investigation, and the request, the Tax Authorities will be permitted to approve the Voluntary Disclosure Request, even in case information exists as mentioned above in Clause 3, or any conducted audit or investigation as mentioned above in Clause 2 and 4.
C. MODE OF ACTION
7) A Voluntary Disclosure Request will be solely filed to the Senior Vice President of the Investigation and Intelligence Department of the Tax Authorities, and it is in his sole authority to approve the request (Hereinafter: the “Certified Authority”).
In case a request is filed to another authority within the Tax Authorities, this “other Authority” will forward the request to the Certified Authority immediately.
8) The Voluntary Disclosure will be in whole and will include all the relevant information required for the request, including, the names of the applicants, the relevant taxable years, source of income, specification concerning the omitted amount of income and the estimated tax amount for payment. The request will include all relevant attached documentation.
9) A signed application by the Applicant is required to be attached to the request, according to the version attached hereunto as Appendix B’ to this Procedure.
10) Each request needs to be signed by the Applicant. In case the Applicant is being represented, a Power of Attorney needs to be attached to the request.
11) The Applicant will be informed in case the Certified Authority encounters that the request cannot be approved.
12) In case the Certified Authority encounters that the Request stands along with the conditions of the Procedure, the Certified Authority will inform the Applicant that the request is approved, and for final approval subject to the tax payment according to the decision of the Civil Authority. After approval of the request, the Certified Authority will forward the request to the relevant Civil Authority (income tax assessor, local VAT supervisor, real estate taxation principal, customs collector etc.) of which will determine the final amount of tax for payment.
13) The Applicant will pay the tax according to the date the Civil Authority will decide.
The tax payment according to this Clause means the following – source payment, linkage, interest and civil fines according to the decision of the Civil Authority and according to the date as will be decided by him.
14) The applicant will cooperate in an honest manner and fully devoted towards any relevant Authority in name of the Tax Authorities concerning any matter related to the Voluntary Disclosure.
15) In case the tax payment has been made according to the decision of the Civil Authority and according to the specific date as instructed, no criminal prosecution against the applicant concerning the Voluntary Disclosure request of which has been approved as mentioned above in Clause 12, will occur.
D. CONDITIONS FOR LEGAL IMMUNITY AGAINST CRIMINAL PROSECUTION
16) A person has the right to benefit from a Voluntary Disclosure Procedure only once. An additional request will only be accepted in case of special reasons, for example in case the Applicant has a malignant disease, an Applicant with an advanced age, etc.
17) The Procedure does not apply on income derived from illegal activities.
18) The Procedure does not apply in case the tax payment does not actually yield a significant amount for payment concerning the relevant taxable years concerning the request. Nonetheless the above mentioned, the procedure also applies in case the tax payment is not significant, in case we are speaking about inheritance money (or in similar cases) of which the sole violation of the Applicant is “not reporting” starting from the year 2003.
19) The legal immunity against criminal prosecution applies solely concerning the information forwarded to the authorities in the frame of the Voluntary Disclosure request.
20) Immunity according to this procedure solely applies concerning offences according to tax legislation as specified in Appendix A’ attached to this Procedure.
21) The Voluntary Disclosure according to this procedure does not apply concerning offences as defined as administrative offences according to the Administrative Offence Tashm”vav – 1985 Statute.
22) In case of breach of the Clauses 1, 8 or 14 of this Procedure – no immunity from a criminal prosecution will be granted to the Applicant and the Tax Authorities are allowed to use the information data the Applicant transmitted in frame of the request as evidence in any criminal or civil procedure against him.
23) In case the request will not be approved by the Certified Authority, the Tax Authorities will not make any use of the information data received in the frame of the Procedure, even in a case of civil proceedings.
24) This Procedure replaces any previous procedure or any previous executing provisions concerning Voluntary Disclosure Procedures.
25) Implement and appliance: This Procedure applies from the day of publish until the day of the 31st of December, 2016.
Israeli Tax Authorities