Israel to Join GATCA
Israel will be joining an international mechanism for the sharing of information on financial accounts, the Finance Ministry announced Monday. The cross-border exchange of information, which is due to be in place by the end of 2018, is expected to make it more difficult to evade paying taxes on financial assets.
The announcement could have dramatic implications for overseas investors with undeclared assets in Israel. Once the new system is in place, the assets would be automatically disclosed to participating foreign tax authorities. It would also affect Israelis with undeclared financial holdings abroad, which the Israel Tax Authority could be informed of. The Common Reporting Standard, is expected to expand to a network of about 50 countries, the Finance Ministry noted.
Formally called the Standard for Automatic Exchange of Financial Account Information, the mechanism was developed through the Organization for Economic Cooperation and Development (OECD), a grouping of the world’s developed economies in which Israel is included. It is patterned on FATCA, the United States Foreign Account Tax Compliance Act, pursuant to which Israel and the U.S. have a similar information-sharing arrangement, which goes into effect next year.
If FATCA wasn’t the endgame, don’t expect GATCA to be either. See this IM article to see the terrible things that will follow GATCA.