The following is a general English translation of the official Hebrew publication prepared by Rachel Levkowitz, an independent Israeli CPA, working in our office.
Have you received the Form 5329 – from the Israel Tax Authority? (Mas Hachnasa)
Over the
past few weeks, many Israeli citizens have received a letter from the Israeli
Tax Authority, whose title reads: "Personal information Report and Declaration
of Sources of Income”.
The form requires Israeli citizens to:
Principally, the people who have received the FORM 5329 are split into three main groups:
Refusing to fill out the form, or filling it out incorrectly, may be considered a criminal offense. It is important to fill out the form carefully and precisely, with the help of a professional accountant, and to confirm all tax related aspects that emerge from it; which can include retroactive taxes from up to ten prior years and taxes of future tax years.
It is strongly suggested that those who are obligated to report their income and are not doing so to reconsider their decision in light of the Israeli Tax Authority’s campaign to find all those who are withholding information about their income, a result of an agreement between the U.S. and Israel strengthening international tax law enforcement.
The form requires Israeli citizens to:
- Fill out their source of income and detail their bank account balances.
- Report whether or not they are shareholders in a company or partners in a business.
- Detail all real estate assets and all homes that belong to either them or their spouses.
- Provide further information that the Tax Authority will use to determine whether citizens are hiding part of their income.
Principally, the people who have received the FORM 5329 are split into three main groups:
- Those that have more than one apartment or home and are therefore, in most cases, obligated to report their rental income and pay Israeli taxes on it.
- Those that remain outside of Israel for more than 90 days during the fiscal year, and therefore are suspected of having business, income and assets outside of Israel that they have not reported to the Israeli Tax Authority.
- The third group are those who do not report themselves as paid workers, yet have made irregular or suspicious withdrawals from and deposits to their bank accounts that were not officially documented by the Tax Authority.
Refusing to fill out the form, or filling it out incorrectly, may be considered a criminal offense. It is important to fill out the form carefully and precisely, with the help of a professional accountant, and to confirm all tax related aspects that emerge from it; which can include retroactive taxes from up to ten prior years and taxes of future tax years.
It is strongly suggested that those who are obligated to report their income and are not doing so to reconsider their decision in light of the Israeli Tax Authority’s campaign to find all those who are withholding information about their income, a result of an agreement between the U.S. and Israel strengthening international tax law enforcement.
