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Declaration of assets in Israel - introduction
You've been asked to complete your Wealth Declaration in Israel, and you've thought of "certain techniques" that can get you out of trouble?
Very often, taxpayers who have to file a Wealth Declaration in Israel try to "justify" certain unexplained sums using various techniques.
Here is a list of techniques that are likely to send you straight to the Tax Inspector's office:ALSO READ: Questions and answers about Atsarat Hon.
Give a gift to a family member.
If you've ever thought of depositing a sum of money into a family member's account, in exchange for a "loan" or "gift", forget it quickly.
The tax inspector will ask to see your family member's bank statements, and will soon realize the deception.
A lot of time has passed since I last declared my assets in Israel.
If you've been thinking about adding unjustified assets to your estate, thinking that the tax authorities won't check and compare because "a lot of time has passed since my last return", forget this too.
The Israeli tax authorities have highly sophisticated tools at their disposal, and are able to compare a person's assets over a very long period.
Taking the lead - anticipation.
If the end of the tax year is approaching and you've sensed that you'll soon be required to file an asset declaration, don't try to "fix your accounts", or transfer money to a friend.
In any case, you'll need to provide bank statements for the entire period, and the tax authorities will ask you to provide proof of these money transfers.
Assets abroad.
If you think you can avoid declaring your assets abroad, think again.
Israel's tax authorities have state-of-the-art techniques at their disposal, and have recently set up a program to uncover the assets of Israelis abroad.
"I won money at the Casino".
Think you can justify an unexplained difference by saying it comes from your casino winnings? Forget about it.
The Court in Israel has ruled that, generally speaking, when you win at a casino, you also very often lose, which statistically represents at least as much as your winnings (it's well known that the casino always wins).
So we can't just look at the profit side, but have to consider the whole equation.
Attestations" of family abroad.
Certificates" and "attestations" from relatives abroad concerning "loans" or "gifts" they have given you are accepted with great deference by the Tax Authorities and the Court in Israel.
If you give gifts to friends and family, or if you grant loans, remember to declare this in your declaration, as the "recipient" of these gifts or loans will declare in his or her wealth declaration that he or she has received a gift or loan from you, and you will find yourself in the uncomfortable position of being asked why you didn't include this loan in your assets.
Safe & valuables.
If you have a bank safe-deposit box, remember to declare it. It will appear on your bank statements, and it will be easy for the Tax Inspector to discover that you have a bank safe-deposit box.
The same goes for valuables in your possession. Remember to declare them, as they appear in your home insurance contract, and will be easy for the tax inspector to discover.ALSO READ: A few tips for completing your asset declaration.
