September 2016 – Implementation of FATCA rules to begin in coming days in Israel
Two years ago, in June 30th 2014, Israeli and American governments signed an agreement to implement FATCA regulations in Israel. The agreement necessitates the local banks and other financial institutions to transfer information regarding bank accounts, financial assets and income of US citizens with Israeli accounts and Israeli citizens with green cards to the Israeli tax authorities and to the American IRS.
FATCA (Foreign Account Tax Compliance Act) was enacted in 2010. Its purpose is to prevent the evasion of tax by American citizens that conduct business abroad. The Act dictates that non-American financial institutions perform due-diligence and other inquiries, identify clients with American accounts and transfer the information to the American authorities.
The timeline in the agreement states that all financial information must be transferred by the financial institutions and banks to the Israeli tax authorities by September 20th 2016. However, public pressure lead to an extension of the due date by ten days to September 30th 2016.
Following the implementation of the agreement, many businessmen that avoided submission of annual reports to the IRS will be forced to do so because of the information transfer between Israeli and American tax authorities. Our firm has a department that specializes in American reports. The department was recently reinforced with a senior accountant who is proficient in both Israeli and American tax laws.
American citizens living in Israel that did not submit FBAR and IRS reports are encouraged to do so immediately. We are glad to assist in submitting the required reports and to offer additional services.
