What is Voluntary Disclosure?

Voluntary disclosure is a procedure that allows individuals and companies to report to the Tax Authority income or assets that were not reported in the past, and in return – receive protection from criminal proceedings. The procedure is made available from time to time under guidelines published by the Tax Authority.

Who Is It For?

  • Holders of unreported foreign bank accounts
  • Those who received income from abroad (rent, dividends, capital gains)
  • Business owners who did not report certain income
  • Those who inherited money or assets abroad
  • People holding cryptocurrency who did not report gains

Advantages of the Procedure

  1. Protection from prosecution: The taxpayer will not be criminally prosecuted for non-reporting.
  2. Certainty: Settlement with the authority on known terms.
  3. Peace of mind: An end to exposure to investigations and proceedings.
  4. Tax planning: Within the procedure it is sometimes possible to plan tax liability optimally.

Stages of the Procedure

Stage 1: Initial consultation

In the first stage, the lawyer conducts a comprehensive review of the client's fiscal situation and estimates the expected tax liability.

Stage 2: Submitting the application

Submission of an anonymous application (without naming the taxpayer) or a regular application (with full details) to the Tax Authority, together with all required documents.

Stage 3: Negotiation

Negotiation with the authority on the amount of tax liability, interest and linkage, and payment terms.

Stage 4: Closing the file

Payment of the agreed tax and receipt of confirmation that the procedure is complete.

Important to Know

  • The procedure is only available as long as no investigation has been opened against the taxpayer.
  • Full disclosure of all income and assets is required – partial disclosure can disqualify the procedure.
  • Representation by an expert lawyer is critical – both legally and from a tax perspective.

Summary

Voluntary disclosure is a real opportunity to settle your position with the Tax Authority on favourable terms and without fear of criminal proceedings. At Adar – Dor we lead complex voluntary disclosure procedures, with extensive experience before the Tax Authority and the courts.