New Immigrants To Israel Are Among Those Facing Call For Immediate Tax Data

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Many new immigrants and returning Israelis have been receiving letters in recent weeks from the Israel Tax Authority demanding they report their sources of income from Israel and abroad within 30 days.

The letters, which are part of a four-year old crackdown by the authority, may come as a surprise to both groups because under the so-called Milchan Law they are exempt from disclosing their foreign income and assets for the first 10 years after they arrive.

The tax authority confirmed on Wednesday that the 5329 form that recipients are ordered in the letters to complete doesn’t require new immigrants or returning Israelis to disclose their income or assets from overseas, only their Israeli income and assets.

“Concerning their assets and incomes abroad, they have the option on the form of saying they are exemption from reporting,” the authority said. However, someone who opts not to disclose the information is at risk later of not qualifying for the tax authority’s voluntary disclosure track later on because technically receipt of form 5329 means the taxpayer is formally under investigation.

Meir Nussbaum, a tax specialist at the law firm Nussbaum & Company, said new immigrants and returning Israelis should exercise their right not to report income or assets abroad.

The taxman's targets*

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“It is very important to maintain rights granted by law (and accordingly not to report income and/or assets abroad), but from the other side it’s also very important to be sure that all the assets and income generated in Israel are duly reported,” he said in statement.

The Israel Tax Authority has been sending out letters like this in waves since 2015, ther last tiome about six months. All told, it says it has sent out 158,000 of the letters, which have resulted in about 50,000 case files being opened and collections totaling 1.5 billion shekels ($420 million at current exchange rates).

The authority said new immigrants and returning Israelis are not being targeted, but they are more likely to appear in the lists officials have prepared. Those are culled from data that investigators believe signal that someone has income or assets abroad.

Among the things investigators look for are people who frequently travel abroad, hold two or more passports, have purchased expensive assets or file for a tax adjustment (te’um mas). Another target group is Israelis who own two or more homes.

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Efrat Neuman
>Efrat Neuman

Haaretz Contributor

Efrat Neuman

Efrat Neuman

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Source : https://www.haaretz.com/israel-news/business/new-immigrants-among-those-facing-call-for-immediate-tax-data-1.6095386

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