On November 5 the Israeli Tax Authority (ITA) announced that the Haifa District Court had lifted a gag order on a Swiss Bank affair that had been under wraps since June 26.
According to the announcement, the ITA had been running an undercover investigation on Swiss bank accounts held by Israelis. Large Swiss banks apparently manage accounts of thousands of Israelis amounting to hundreds of millions of Euros. It is suspected that most of these accounts are unreported to the ITA.
So far 14 suspects have been arrested including a senior investment advisor at UBS bank, according to the ITA announcement and twelve Israelis, including two who apparently own a chain of clinics abroad with activities amounting to EUR 40 million registered in tax havens, while concealing control and management conducted from Israel. If proven, this would mean the clinic entity(ies) involved are fiscally resident and taxable In Israel. Apparently the conduct of the activity was in the past shifted out of Israel….
On July 26, the Swiss bank senior investment advisor was arrested in Tel-Aviv. He would arrive in Israel for secret meetings with clients who refrained from transferring instructions to the bank by telephone, fax or email. On that date, he and another staff member held meetings with Israeli clients in a luxury hotel in Tel-Aviv under eagle eye of tax investigators. At the end of a meeting with the one of the clinic owners, all the participants were arrested.
The hotel room and the Israeli rep office of the bank were searched. In the equipment of the senior investment advisor, lists were apparently found of hundreds of Israelis with undisclosed Swiss bank accounts that he was responsible for handling.
This triggered an investigation into the clinic owners, the clinic operations sand dozens of other suspects…One was apparently a lawyer from Tsoran, another was an engineer and shareholder of a water/energy/agricultural infrastructure company that made agency commission abroad which was allegedly not reported to the ITA.
We don’t know much from the ITA announcement, but the case seems to resemble an Australian affair a few years ago. It seems the shifting of clinic operations out of Israel may perhaps have given the ITA their first lead….It remains to be seen what further details emerge as the case evolves.
The writer is a certified public accountant and tax specialist at Harris Consulting & Tax Ltd.