(photo credit: INGIMAGE)
The Israeli Tax Authority (ITA) has developed certain habits, such as surprise visits, freezing bank accounts, nonstop fines, denying the ability to trade with public bodies and problems answering the phone.
And yet, on September 12, 1991, a Taxpayers’ Charter was signed by the finance minister, Knesset Finance Subcommittee, tax commissioner, Histadrut secretary and other economic bodies. The Taxpayer Rights Charter is conspicuously absent from the ITA’s website, but you can find it at the website of the Ministry of Welfare and Social Services (http://shil.haifa.ac.il/ shil2/jsp/general/Article.jsp?aid=224&cid=12).
The Taxpayers’ Charter gives taxpayers a number of important rights’ as summarized below: First, the right to fair and courteous service: the right to receive information and fair service from tax offices. Tax staff are first and foremost State employees whose function is to serve the public. On the other hand, tax officials work hard and are entitled to reciprocal fair relations from the taxpayer. The tax is for everyone’s benefit.
Second, the right to complain: all the way up to the tax assessing officer and if your problem isn’t solved you can go the Income Tax Division ombudsman at the Income Tax Commission.
Third, the right to a trusting relationship: You are entitled to trust regarding books you keep and returns you file, so long as the ITA does not have information, reasonable cause or evidence that would justify doubt about their accuracy.
Fourth, the right to answers within a reasonable time.
Fifth, the right to confidentiality.
Sixth, the right emanating from keeping books according to the law: if a tax return is based on acceptable books and a reasonable level of income, the chances are greater that it will be approved by the Assessing Officer. If a notice of unacceptable books is issued, there is a right of appeal.
Seventh, the right to make claims and receive a reasoned response: if you filed a tax return of your income, the ITA won’t issue an assessment to the best of their judgment without giving you a reasonable opportunity to express your case. If the Assessing Officer decides not to accept the return you filed, and to prepare a best judgment assessment, the assessment must be reasoned and specify how it was done.
Eighth, the right to object to an assessment and appeal an order: you can make a reasoned objection to a best judgment assessment by the ITA within 30 days after receiving the assessment.
The debate over the objection will not take place before the ITA person who issued the assessment. If your objection is rejected and an order (to pay the tax) is issued, the order may be appealed within 30 days at the District Court. But if you don’t object or appeal in time, the assessment or order become final.
Ninth, the right to delay payment of tax in dispute.
Tenth, the right to a reduction in withholding tax and tax installments – where applicable, if you make a reasoned request.
But if it turns out at the end of the year that the reduction was not justified, you will be charged interest and indexation (inflation adjustment). If the Assessing Officer rejects your request, he must give his reasoning.
Eleventh, the right to assistance and guidance in filing the annual tax return.
Twelfth, the right to a tax refund – with interest and indexation – if you overpaid tax and filed a tax return based on books prepared according to the law.
Thirteenth, if you stop your activity, you must notify the tax office in writing so that it can act accordingly.
Fourteenth, fulfillment of taxpayer obligations: if you file tax returns lawfully and on time as required, pay tax due on time and meet the requirements of the law, this will enable the ITA to give the service you deserve and avoid unnecessary trouble Fifteenth, suggestions for improvement: the ITA says it is doing its utmost to improve its service to citizens. Nevertheless, if you have a suggestion for improvement and efficiency, you are invited to write in to the ITA and each suggestion will be discussed with openness and appreciation.
Comments: These rights are actually enshrined in the law and merely reiterated in the charter. It is unfortunate the ITA has stopped publicizing the taxpayers’ rights charter. Some may wonder if the ITA has problems living up to its side of the bargain.
As always, consult experienced tax advisers in each country at an early stage in specific email@example.com The writer is a certified public accountant and tax specialist at Harris Consulting & Tax Ltd