Tax Offenses Lawyer

A tax offenses lawyer represents a suspect or defendant in criminal proceedings conducted by the Israel Tax Authority: during a cautioned interrogation, at a pre-indictment hearing, and in court. The most serious offense under the Income Tax Ordinance is deliberate fraud with intent to evade tax (Section 220), carrying a maximum penalty of up to 7 years' imprisonment. Under the VAT Law, the penalty for a similar offense is up to 5 years, and up to 7 years in aggravating circumstances (Section 117). Have you received a summons for interrogation? Call us before the scheduled date so we can understand the suspicion and prepare with you.

Most clients contact us in one of the following situations:

• You received a summons for a cautioned interrogation from an Income Tax investigations office or a Customs and VAT investigations office.

• Investigators arrived at your business or home, conducted a search, and seized computers, phones, or accounting records.

• A supplier you worked with is under investigation for issuing fictitious invoices, and now you are being questioned about the invoices you received from that supplier. The criminal and civil proceedings in such a case are explained on the Fictitious Invoices Lawyer.

• You are a director or shareholder of a company under investigation, and it is unclear whether you were summoned as a witness or as a suspect.

• You received a letter stating that the investigation file has been transferred to the prosecution, with an option to request a pre-indictment hearing.

• Funds in your business bank account were seized as part of an investigation.

• You are considering requesting to close the case through kofer (compounding) and want to understand what that entails.

Tax investigations are conducted by the investigation units of the Israel Tax Authority. According to the Authority's published structure, the Income Tax division operates four regional investigation offices (Assessing Officer – Investigations) and a national investigations unit known as the Yahalom Unit. Customs and VAT operate four additional regional investigation offices. These are units separate from the assessing office and the VAT office that handle your tax returns.

Investigators hold statutory powers. An assessing officer authorized under Section 227 of the Income Tax Ordinance may take statements, conduct searches, and seize documents. An authorized VAT investigator may enter a business, seize books and documents, and interrogate any person, and has the powers of a police officer for the detection of offenses (Section 109 of the VAT Law). In cases where other offenses are also suspected, the investigation may be conducted jointly with the Israel Police.

The difference is intent. A technical offense is a breach of a statutory duty without sufficient cause — for example, a return that was not filed or failure to comply with a summons to appear. A substantive offense requires an intent to evade tax, and the prosecution must prove that intent beyond a reasonable doubt. The maximum penalties prescribed by law:

• Section 216 of the Income Tax Ordinance — for example, failure to comply with a demand in a notice or failure to appear as required: one year's imprisonment or a fine.

• Section 220 of the Ordinance — omitting income from a return, maintaining false books, or fraud and contrivance, when committed willfully and with intent to evade tax: 7 years' imprisonment, or a fine plus twice the amount of the concealed income, or both.

• Section 117(a) of the VAT Law — for example, a return not filed on time or refusal to appear for interrogation: one year's imprisonment.

• Section 117(b) of the VAT Law — acts committed with intent to evade tax, such as issuing an invoice without a transaction or deducting input tax without a lawful document: 5 years' imprisonment or a fine.

• Section 117(b2) of the VAT Law — the same offenses in aggravating circumstances, such as a prior conviction within the last three years or a high amount of evasion: 7 years' imprisonment.

Liability of Corporate Officers

When an offense is committed within a company, the law deems a managing director, partner, accountant, or other responsible officer equally guilty, unless they prove that the offense was committed without their knowledge or that they took all reasonable steps to prevent it (Section 224A of the Ordinance; Section 119 of the VAT Law). Therefore, in a corporate case, it is important to determine early on which officers require separate representation.

Statute of Limitations, and the Tax Itself

An indictment under the Income Tax Ordinance may be filed within 6 years from the tax year in which the offense was committed, and for an offense under Section 220, within 10 years (Section 225). Criminal proceedings do not exempt the taxpayer from the tax liability: even a person who has been convicted or who has paid kofer remains liable for the tax (Section 226 of the Ordinance; Section 123 of the VAT Law). That is why the tax assessment is handled alongside the criminal case.

Tax Offenses and Money Laundering

Some tax fraud offenses are also classified as predicate offenses under the Prohibition of Money Laundering Law, in which case the exposure includes forfeiture of assets following conviction. Details are available on the Prohibition of Money Laundering.

1. Before the interrogation. You bring us the summons, and if a search was conducted, the warrant and the list of seized items. We verify which unit is investigating and in what capacity you were summoned — witness or suspect — and meet with you before the scheduled date.

2. The interrogation. A person being interrogated has the right not to answer any question whose answer may incriminate them (Section 2(2) of the Criminal Procedure (Evidence) Ordinance), but a suspect's silence may later strengthen the prosecution's evidence. Therefore, the decision whether to provide a statement, and on what topics, is made in advance based on the suspicion and the documents.

3. Arrest and seizures. A detainee must be brought before a judge within 24 hours (Section 29 of the Arrest Law), where we argue for release on conditions. Regarding seized property and funds, a motion for a return order may be filed with the Magistrate's Court (Section 34 of the Criminal Procedure (Arrest and Search) Ordinance).

4. Transfer to the prosecution. At the conclusion of the investigation, the file is transferred to the prosecution, which decides whether to file an indictment.

5. Pre-indictment hearing. For a felony offense, such as an offense under Section 220 or 117(b), the prosecution generally sends the suspect a notice, and the suspect has 30 days to submit a written request that no indictment be filed against them (Section 60A of the Criminal Procedure Law). At this stage, the full accounting picture can be presented.

6. Resolution. The case may be closed, concluded through kofer (compounding) or a plea agreement, or proceed to trial. We will explain what each option means for your specific case.

Kofer is a procedure in which the Israel Tax Authority agrees to conclude the criminal proceedings in exchange for a payment, without filing an indictment. The decisions of the kofer committees are published on the Tax Authority's website, including the suspect's name. The conditions and considerations are explained on the Kofer Proceedings and Administrative Penalties.

Seizure of funds during an investigation is a temporary measure, while forfeiture is a permanent confiscation typically sought after conviction. How to apply for the release of seized funds is explained on the Release of Seized Bank Accounts.

Tax offense cases are handled by Adv. and CPA Shlomi Vaknin and his firm's team. Shlomi, the firm's founder, served for nearly a decade as a national supervisor in the VAT Professional Division of the Israel Tax Authority, and until he established the firm in 2024, he was a senior partner for 18 years at a tax law firm. In a tax offenses case, the suspicion is built on tax returns, ledgers, and chains of invoices — and Shlomi reads this material as a certified public accountant.

The team also handles the tax assessment and appeal proceedings that run parallel to the criminal case.

Everything you share with us for the purpose of legal advice is protected by attorney–client privilege (Section 48 of the Evidence Ordinance).