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25 September 2015

VAT decreasing to 17%

The decrease in the rate of VAT (from 18% to 17%) is coming into effect on 1 October 2015. Prices need to be updated at that time.

How does this affect a business' reporting requirements?

With regards to expenses, ensure that you take the VAT as shown on the tax invoice (חשבונית מס) - there are some situations whereby a single invoice will have both the lower and higher rates of VAT charged. The most likely examples are your electric and telephone bills.

Onto income reporting.

For those businesses reporting on a monthly basis, nothing really changes as your income for the month of October will all be charged at the lower rate.

However, for those reporting every two months, the rate change comes in the very middle of the period, and so you will be reporting income charged at differing rates. The VAT authorities will not be able to do a proper check of your calculations, other than to check that the average rate falls out somewhere between 17% and 18%. From the actual average percentage they can work out (subject to rounding differences) the split between income charged at 17% and that charged at 18%. If you file online, you will be able to split out the income chargeable at each rate.

Overall, the change is not too difficult to handle, but if in doubt, contact me today.

21 September 2015

Three updates

Three stories of interest from the last few days:

(1) The threshold above which you can no longer remain an osek patur (see here) magically increased to NIS 100,000. And according to the tax authority website, this came into effect as of 1st January 2014! Needless to say that this has caught everyone by surpise; not least those who "upgraded" to osek morshe when their income went over the 80k limit. At this stage, there is no official word from the authorities about what to do in such a situation, but I would doubt that they would allow someone to revert to osek patur quite so quickly.

(2) The final date for applying for the Working Grant for 2014 incomes has been extended until Friday 25th December 2015. See here for more.

(3) Following the announcement a fortnight ago that the "anonymous" and "short" Voluntary Disclosure procedures were being extended (see here), the deadline for filing such a procedure is now 30th June 2016.

If any of this is relevant to you, contact me today.

6 September 2015

Voluntary Disclosure - extension of deadline for short or anonymous claims

At the very last minute, the tax authority announced today that they are extending the deadlines for the short or anonymous disclosures within the Voluntary Disclosure scheme. You can read more here.

At present, the revised deadline has yet to be announced, although my best guess is that it will be until either 30th June 2016 or 31st December 2016 (which is the deadline for the "regular" disclosure route).

The announcement also gives the statistics regarding the claims that have been made over the past year, since the scheme was first announced.

Over 3,000 claims have been made, "koshering" over NIS 10.3 billion. Of the claims made, approximately 60% have been on the anonymous route, and less than 15% using the regular route. The rest have gone for the short version.

More details about the procedures can be found here and here.

If you have income that has not been reported to the Israeli tax authority, contact me to discuss your options and how best to present your case.