Foreign bank Reporting
Recently the Israeli Department of Treasury and the American Authority on Money Laundering signed the FATCA Agreement – Foreign Account Tax Compliance Act. Thereby a new era has opened regarding everything associated with bank accounts and income in general for Israelis with American citizenship in Israel, who are now under the restrictions and laws of FATCA Israel.
According to this agreement, the State of Israel shall receive an ongoing account of details from all the banks of American citizens and it will transfer them in an organized fashion to the American authorities. The banks in Israel must demand from every customer with American citizenship to sign on form W9. On this form personal details are filled in including the social security number and one must sign on a waiver of privacy. A customer who is not willing to sign cannot keep a bank account in Israel.
The implementation of this agreement in Israel demands broad legislative procedures and therefore it has been postponed to the end of 2016.
The significance of the signing on this agreement and its implications on Israelis with American citizenship is on several levels. Below we shall review several things that are important to know:
Requirement to report on bank accounts
Every Israeli bearing American citizenship or a Green Card who has a bank account in Israel (including: an account in a bank, pension, study fund or in any other financial institution) is required to report an annual report to the American Authority on Money Laundering.
The requirement applies only if the account had at one time a sum of $10,000 or more. Otherwise, there is no requirement to report.
There is no need to pay tax for having a large amount in the bank account but it is important to know that not reporting can result in very high fines on the part of the American authorities that can come to 50% of the total sum found in the bank account.
American Documents makes the annual report at a reduced price for those reporting their tax reports to America through the company.
Requirement to report on income
Since your bank account details are transferred directly to the American authorities, it is not worth your while to evade the obligation of every American citizen to report on his income in Israel to the American tax authorities. Generally, if one submits annual reports properly, there is no need to pay taxes; however, for not reporting there is a large fine.
Reports can be submitted through us at a reduced price.
Property in Israel
For every transaction that you make in Israel a suitable report must be made to the American authorities in order to avoid fines or unwanted tax requirements. It is worth your while to consult in advance before making any transaction in Israel in order to avoid the requirement of paying a high tax.
It is strongly recommended that you report, in an orderly fashion through a professional company, on your income and bank accounts to prevent aggravation and unnecessary fines. In many cases you can also benefit from tax returns from the U.S.A. for children, for tuition and other matters.
Contact us today for efficient, fast and professional handling: 058-3232119