Israel is expecting to receive – and in fact is probably already receiving – information regarding bank accounts and assets of Israelis overseas.

The only option for taxpayers holding overseas accounts is to apply for a voluntary disclosure and regulate their tax position before the tax authorities approach them, when things, needless to say, will be less pleasant.

Israel does not receive these treasures of information free of charge. There is a price tag attached – and quite a large one. Israel had always been the home of the Jewish people and looked after their interests wherever they were, as the Jewish Diaspora was always a solid and reliable support for Israel. This delicate balance is about to be tested.

Israel will shortly introduce a new law obligating Israeli bankers to gather full information on foreign residents holding bank accounts in Israel and to report the information to the tax authority.

The purpose of this report is solely to benefit exchange of information for tax purposes with foreign tax authorities. Under the new law, banks and bankers who fail to cooperate may carry heavy monetary penalties and even impressment up to seven years.

Do not get this wrong, I do not think we have much choice. The OECD requirements can be easily justified and understood, so we need to cooperate. There is a new order, and we must be part of it, otherwise we will not be a part of anything. However, this matter is to be treated with the utmost care and delicacy.

It is necessary to be prepared and to look for the best way to reduce the enormous economic and moral blow Israel is about to suffer. It is also important to make sure that foreign taxpayers have enough time to settle their affairs under all relevant laws before they have to face the new regulation’s ramifications. There is a lot they can do and still obey local and foreign laws.

We should bear in mind that this is not the end of the world; it is just a change of world order.

Gidi Bar-Zakay, a CPA and jurist, is the former deputy director of the Israel Tax Authority for professional matters and currently leads a firm specializing in tax consulting and voluntary disclosure.

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