How many people know that with the correct accounting of expenses, with the application of all the appointed benefits laid, all “nikudot zikuy”, an entrepreneur may not have a shekel of taxes to pay at all. Israel has created all the necessary conditions for fair taxation.
How many people know that with the correct accounting of expenses, with the application of all the appointed benefits laid, all “nikudot zikuy”, an entrepreneur may not have a shekel of taxes to pay at all. Israel has created all the necessary conditions for fair taxation.
But illegal manipulations with taxes and concealment of income are punished very severely.
How tax authorities identify violators.
The most common situation: the client did not receive a payment document. He reports this to the tax authorities. The tax is being checked by the entrepreneur. This happens especially often if the buyer was dissatisfied with something, but the seller did not want or could not resolve the problem.
Another example is a disgruntled employee who, in revenge, gives off violations of the employer to the tax authorities.
There are situations when the owner is forced to answer for the fraud of his employees. Unfortunately, the fiscal authorities do not understand who is to blame for the fraud. Responsibility in any case is on the entrepreneur.
Sometimes, tax authorities randomly select and analyze annual business reports and declarations of property of the entrepreneur himself, and also check the compliance of family income and expenses. If there are obvious inconsistencies: if the profit is at the level of the average salary in the country, and the owner buys new elite housing, then serious checks await the entrepreneur.
What may happen if fiscal authorities reveal tax evasion
If an entrepreneur is caught by accidental or deliberate concealment of income, then the tax authorities can show him virtually any amount that he could theoretically earn and demand to pay taxes on this estimated amount.
Taxes will be calculated at the maximum rate. No benefits, which could be counted on in a normal situation, can be applied to these “penalty taxes”.
If a tax audit reveals systematic violations in accounting, the regular concealment of large incomes, this can result not only in huge fines, but also lead to the opening of a criminal case for violation of Israeli tax law. The result is a prison and property confiscation.
The entrepreneur falls into a kind of “black list”. There are three tax authorities in Israel, and if one of them reveals violations, then all the others will soon catch up with their inspections. There will be VERY many audit checks.
What to do if an entrepreneur is already blacklisted
• Only honest and perfect bookkeeping.
• A strict obedience to the rule that if money is received, then documents must be written out on them.
• Full interaction with tax authorities. Perhaps over time, audit checks will become less common.
And it is better to attract an auditor. who will take over the communication with the fiscal authorities. We are often visited by clients who have already done wrong and the tax officers themselves have advised them to turn to a good Rohe Heshbon. in order to solve problematic tax issues quickly and with minimal losses.