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(photo credit: AP)
Israel embarked on a major gradual reform of VAT procedures this year. The aim
is to curtail VAT fraud involving fictitious tax invoices. Consequently,
businesses with annual revenues exceeding NIS 4 million in 2009 must now file
detailed VAT returns listing all sales and purchase invoices, as well as import
documents, on VAT returns filed online, commencing with the January 2010 VAT
The Israel Tax Authority on May 26 announced a postponement for
businesses that have: (1) annual revenues exceeding NIS 1m.; or (2) are required
to keep double-entry books (with debits and credits) under the bookkeeping
Originally the deadline for them to file online returns
listing sales and purchases was January 1, 2011.The bookkeeping
vary from sector to sector. You should consult your accountant if you
Understandings have been reached between the ITA and a body known
as the Online Reporting Compliance Forum.
These understandings have
resulted in a postponement of online reporting to the beginning of 2012.
this ONLY applies to: (1) taxpayers who are allowed to keep books under
single-entry method; (2) nonprofit organizations with at least 300
and (3) financial institutions. This is good news for some small- and
medium-sized Israeli businesses and various charities.
businesses that are required to keep double entry books must use online
reporting by the beginning of 2011, if they didn’t already this year.
covers many firms in Israel. Any remaining businesses will need to use
VAT reporting in 2012.
To file online, you need a special smart card
enabling an electronic signature. So start applying for one soon if you
into one of the above categories required to do so in 2011.
If you have
any questions, you can contact a help line at the ITA: telephone *4954
565-6400. Or else send them an e-mail: mokedreshut@ shaam.gov.il.As
always, consult experienced tax advisors in each country at an early
Leon Harris is an international tax
specialist at Harris Consulting & Tax Ltd.