Until December 31, 2018, taxpayers could still submit an anonymous voluntary disclosure application under the Israel Tax Authority’s Voluntary Disclosure Program.
The principal benefit of successfully completing the voluntary disclosure process was the removal of the risk of criminal prosecution for previously undisclosed tax offenses.
To qualify for the program, the following conditions had to be satisfied:
The disclosure had to be genuine, complete, and made in good faith.
At the time the application was submitted, neither the applicant nor the applicant’s spouse or companies under their control could already be the subject of a tax investigation or audit.
aIt is important to note that participation in the voluntary disclosure program did not exempt the taxpayer from paying tax on previously unreported income or gains. Rather, the process enabled the taxpayer to regularize their tax reporting and pay the tax legally due.
Under Israeli law, tax offenses constitute predicate offenses under the Prohibition on Money Laundering Law. As a result, individuals who commit tax offenses may also be exposed to additional enforcement measures, including the confiscation of assets, funds, and bank accounts, as well as further civil and criminal sanctions.
