the tax authority, with the approval of the Legal Advisor to the Government, announced today the implementation of a voluntary disclosure procedure that will remain in effect until 31.8.26. According to the provisions of the procedure (Heb), businessmen, individuals, corporate officers and representatives, Israeli residents and foreign residents, who have committed offenses against tax laws, will be able to carry out a “voluntary disclosure” procedure, to pay the taxes legally required and thus avoid criminal proceedings. Among the conditions is the requirement that the request was made honestly and in good faith and that at the time of the request, no inspection or investigation is being conducted by the Tax Authority in the applicant’s case.
Requests for voluntary disclosure will be submitted to the authorized entity exclusively via an online form that will be uploaded to the Tax Authority website in the coming days. The requests will be processed in one of two tracks: a regular track and a green track. In the regular track, an assessment agreement will be signed with the relevant office. In the green track, which is intended to expedite the processing of applications with relatively low amounts of capital, the applicant will submit a corrective report or a report in the event that a report was not previously submitted, which will include the income on which he wishes to report as part of the voluntary disclosure.
In the green track, applications will be processed that relate to income originating from financial assets held in a financial institution outside Israel whose balance as of 12/31/2014 is less than 4,000,000 NIS, and there were no new deposits/transfers of funds to the financial account during the disclosure period; or income from a residential rental in Israel and/or abroad in an amount not exceeding 250,000 NIS per year; or income originating from digital assets in an amount not exceeding 500,000 NIS for the entire disclosure period, and the fair value of all digital assets as of 12/31/2024 does not exceed In the amount of 1,500,000 NIS. The decision on the track in which the application will be processed will be made by the Tax Authority, after the application is approved.
In cases where the application is not approved, the Tax Authority will not be able to use the information provided, whether in a civil proceeding or as part of a criminal investigation. The Tax Authority will be able to use any information related to the request for voluntary disclosure that has reached it in another way, or in cases where the tax has not been paid or the request was not made in good faith, or part of the relevant information has been concealed.
The procedure applies to the tax offenses detailed in Appendix A to the procedure and relates to all tax bases (income tax, VAT and customs, and real estate tax) and all types of income. Payment of tax in relation to the disclosure of income originating from digital assets can be made in accordance with the “Temporary Provision Procedure for Receiving Tax Funds Due to Profit from Realization of a Decentralized Payment Means” (Heb).
Similar procedures were implemented in the past in 2011-2012, 2014-2016, and 2017-2019. As part of these procedures, approximately 9,000 cases were handled and tax was collected in a total amount of approximately 5 billion NIS.