Don't let tax uncertainty harm your profits or your freedom. Early planning is the difference between complete peace of mind and unnecessary, costly entanglements. Do you have businesses overseas? Planning a relocation? Contact Shlomi Vaknin & Co. today for discreet, personalized legal counsel that will protect your capital in Israel and around the world.
When the Global World Collides with the Arms of the Tax Authority
In an era where businesses operate overseas, Israelis relocate abroad, and digital nomads work from any point on the globe – tax borders become blurred. The Israel Tax Authority operates on a "personal" basis, meaning: an Israeli resident is liable for tax on all worldwide income. Misunderstanding the "center of life" tests, errors in residency severance procedures, or failure to report foreign bank accounts and overseas income expose you not only to heavy double taxation payments, but also to massive penalties and a real risk of criminal proceedings for tax evasion.
Global Tax Planning and Legal Certainty
Establishing your tax status in the international arena requires meticulous planning and reliance on Israeli law and tax treaties. The solution involves building a smart strategy for secure residency severance, implementing treaties for the prevention of double taxation between countries, and maximizing the benefits enshrined in law (such as a 10-year exemption from reporting and tax on foreign income for new immigrants and veteran returning residents). In cases where past liabilities have arisen due to failure to report overseas assets, it is possible to legitimize the funds through voluntary disclosure procedures or assessment agreements with the assessing officer, while neutralizing criminal exposure.
Why Choose Shlomi Vaknin & Co.?
International tax planning tolerates no mistakes or amateurism. The law firm of Shlomi Vaknin & Co. provides a comprehensive shield and strategic guidance that bridges the gap between your business and personal reality abroad and the stringent requirements of the Israel Tax Authority. Our deep familiarity with the Tax Authority's enforcement policies, combined with expertise in both the criminal and civil spheres, enables us to tailor the most precise "tax suit" for you – one that will protect your capital, prevent excess tax payments, and ensure your peace of mind anywhere in the world.
Questions & Answers
I'm relocating abroad – do I automatically stop paying tax in Israel?
Absolutely not. To cease being considered an Israeli resident for tax purposes, you must pass the "center of life" test (which examines where your family, assets, and interests are located) and sometimes quantitative tests as well (days of stay). A structured process of "residency severance" is required to prevent future tax demands.
I have a bank account or real estate abroad – am I required to report it?
Yes. An Israeli resident is required to report holdings of foreign assets (above a certain threshold updated by law) and passive income derived from them, such as rental income, interest, or dividends. Failure to report constitutes a criminal offense.
How can new immigrants and veteran returning residents save on taxes?
The Income Tax Ordinance grants them an extensive "tax holiday": an exemption from reporting and from tax payment on most income and assets outside Israel for a period of 10 years from the date of return or immigration. It is essential to verify that you meet the statutory conditions in order to enjoy this benefit.
How do you ensure I won't pay tax in both Israel and the foreign country?
By relying on double taxation prevention treaties that Israel has signed with dozens of countries, and through tax credit mechanisms (receiving a "credit" in Israel for tax lawfully paid in the foreign country).
Get an Initial Legal Consultation
Leave your details and one of our attorneys will get back to you today.
