Pillar of Defense and your taxes

Your Taxes: The Israel Tax Authority (ITA) is playing a role in Gaza mission by paying financial compensation and allowing more time to report, pay taxes.

By LEON HARRIS
November 20, 2012 22:32
2 minute read.
Isreli currency.

Money cash Shekels currency 521. (photo credit: Reuters)

The Israel Tax Authority (ITA) is playing a role in Operation Pillar of Defense by paying financial compensation and allowing more time to report and pay taxes.

Financial compensation

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Fifty teams of ITA employees and assessors are deployed in all the stricken areas and are providing initial financial assistance to citizens, the ITA announced Tuesday. A Help line has been set up at (08) 662-3300, and more than 1,200 incidents were reported after six days of the campaign.

With regard to buildings, the government undertakes to compensate damage caused by hostile action, in accordance with the law. The aim is to rectify the situation as fast as possible.

With regard to household possessions, the government provides compensation according to a price list based on type of item and size of the family. But there is no compensation for money, food, checks, jewelry and artwork.

For example, a married couple with two children can claim NIS 52,053 for furniture, NIS 20,933 for clothes, NIS 37,857 for electric appliances and electronic devices and NIS 24,505 for other household items. Before damage occurs, additional amounts up to NIS 863,808 may be insured by paying a premium of 0.3 percent.

Vehicle damage will be repaired at any garage subject to the approval of a government assessor.

Business assets will be recompensed based on their market value at the time of the damage. Business inventory will be recompensed at cost before VAT. It will be necessary to prove ownership by providing invoices, inventory lists or financial statements confirmed by an accountant.

Higher compensation is available to people who bought insurance from the government. Up to NIS 863,808 of extra coverage can be purchased by paying a premium of 0.3%.

Tax measures

A number of tax administration measures have also been implemented. First, the ITA has announced a general extension from November 30 to December 31 for filing 2011 annual Israeli tax returns. This applies to taxpayers who use an Israeli CPA or tax adviser, as these professionals are allowed to stagger the tax-return filing of their clientele over several months beyond the normal filing deadlines of April 30 or May 31.

Second, the ITA has granted an extension for monthly/bimonthly filings from November 15 to November 27 regarding income tax and VAT. This only applies to residents in the South within 40 kilometers of the Gaza Strip.

National Insurance Institute filings are currently due this Wednesday,and we are awaiting a further extension.

Third, taxpayers and tax preparers who do not live in the South but were called up to serve in reserve units and cannot report on time are permitted to apply to their tax office for a cancellation of any penalties, interest and indexation. The ITA director has instructed tax and VAT officials to “apply broad discretion, understanding and sensitivity” in dealing with such cancellation requests (this is not normally the case?).

Wishing all readers peace and quiet wherever you are.

As always, consult experienced tax advisers in each country at an early stage in specific cases.

Leon Harris is a certified public accountant and tax specialist at Harris Consulting & Tax Ltd.  leon@hcat.co


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