Kofer Proceedings and Administrative Fines

A criminal indictment for tax offenses is a lifelong stain. It results in a criminal record, damages your business reputation, prevents participation in tenders, and in many cases ends in actual imprisonment. However, Israeli law recognizes that not every tax offense should end behind bars. For many taxpayers, there exists a narrow "window of opportunity" that allows converting the threatening criminal proceedings into a monetary sanction alone. The critical question is: how do you convince the system that you deserve this second chance?

Kofer Proceedings: Section 221 of the Income Tax Ordinance (and parallel provisions in VAT and Customs law) grants the Tax Authority the power to impose a "monetary kofer" on a tax offender in lieu of conducting criminal proceedings. This means: the case is closed, there is no trial, and no criminal record. The threshold conditions are rectification of the breach (payment of the evaded tax) and convincing the "Kofer Committee" of mitigating circumstances.

Administrative Fine: For more technical offenses (failure to file returns on time, failure to withhold tax at source), the Authority tends to settle for imposing a fixed administrative fine. Payment of the fine concludes the matter, though it is also possible to file a request to stand trial or to reduce the fine if justified circumstances exist.

Paying the debt is not enough — you need to know how to tell the right story. Our firm specializes in building a winning "kofer case." We gather evidence regarding personal, medical, and financial circumstances, emphasize the absence of a criminal record and the swift rectification of the breach, and conduct persistent negotiations with the Tax Authority's Legal Department. Our goal is clear: to ensure you leave the room with a monetary fine only, and not with a summons to court.