Thousands of bank accounts held by Israelis in the Cayman Islands are being investigated, Israel Tax Authority Director Eran Yaakov revealed last week. The probe was launched after Caymanian authorities alerted their Israeli counterparts of thousands of Israeli accounts that have gone unreported in previous years.
The Cayman Islands are one of the most well-known tax havens in the world because there is no corporate or income tax on money earned outside of its territory. Instead of taxes, offshore corporations pay an annual licensing fee directly to the government.
Speaking at the annual Institute of Certified Public Accountants in the southern resort city of Eilat, Yaakov said the tax authority plans to examine the circumstances under which the accounts were opened and held.
"We received very interesting information from the Cayman Islands and from other countries, which will require us to see if those who chose to manage accounts in the Cayman Islands have explanations for doing so," he was quoted as saying by financial daily The Marker.
According to a report in Jewish Business News, the information was obtained through the Joint Reporting Procedure, an international mechanism through which dozens of countries report to each other on foreign-held financial accounts.
Israel recently completed the necessary legislation to join the global information exchange network.
The tax authority said it would allow Israelis who hold accounts overseas and who have not reported them to so do voluntarily until the end of 2019, and receive immunity from criminal proceedings.
Yaakov said that the voluntary disclosure procedure would not be extended beyond the end of 2019.
