10 tips for your asset declaration

patrimony in Israel Cabinet Expert Comptable Dray & Dray

Atsarat Hon, the real headache

Declaring assets in Israel can be a real headache for taxpayers.

Between unjustified sums and unexplainable discrepancies, many taxpayers broke out in a cold sweat before submitting their asset declarations.

It's a fact that it's not easy to justify yourself to the tax authorities in Israel, who have state-of-the-art tools at their disposal and are very clever.

However, here are 10 tips to help you declare your assets:

  1. It is essential to compare your tax return with your previous returns before submitting it to the tax authorities, to check for errors and "unexplained differences".
  2. Don't forget to take into account your Bituah Leumi (social security) payments. These payments often represent large sums, and taxpayers often tend to forget about them because they are not deducted from the cash flow in the annual balance sheets.ALSO READ: Things to avoid in a wealth declaration.

3. Israel's tax authorities know everything! They receive reports from various authorities, such as :

  1. Your trips abroad: It's important to remember to declare your trips abroad, as this is one of the first things to be checked by the tax authorities.
  2. Work on your house: You've extended your house, and you've been asked for Tofes 4 (permission to enter an apartment)? Don't forget to declare this "forgotten" expense, because the Tax Inspector won't forget it.
  3. Have you won a judgement? Don't forget to include this income in your tax return, as this type of information regularly arrives on the Tax Inspector's desk.

4. Keep all documents and accounting records of non-regular transactions or receipts of money from different sources: this is excellent evidence and will help you greatly in preparing your return.

5. Don't forget to include the exempt rent you receive as a property owner. These exempt rents represent substantial sums, and taxpayers often tend to forget about them. However, they can be an important piece of evidence to explain the increase in your capital.

6. Do not accept bank transfers into your account, even if the transfer is charged a small commission by the bank. Israel's tax authorities and courts tend to regard such transfers as "undeclared cash inflows". And not as "simple banking operations".ALSO READ: Questions and answers about Atsarat Hon.

7. Make sure that "gifts between family members" match. The person receiving the gift can justify an increase in capital thanks to it. However, the person giving the gift will need to be able to justify the amount.

8. Declare the cash you have at home and in your safe. Failure to declare them will result in a lack of evidence to explain the increase in your capital.

9. You need to declare any assets you have abroad. Taxpayers tend to forget this when they first declare their assets. Tax authorities and the courts will not accept money coming in from undeclared assets.

10. Make a list of every gift you receive.

Our advice:

Don't take your asset declaration in Israel lightly.

Call in the professionals to avoid costly mistakes!



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