The Tax Authority is holding up refunds for value added tax (VAT) after the bank account information of thousands of business owners was deleted as part of a sudden change in policy concerning shared bank accounts, according to the Institute of Certified Public Accountants (ICPA) in Israel.
Thousands of business owners who share a bank account with their spouse received a message simply stating that "bank account details for refunds were missing and the details should be updated."
According to accountant Ariel Fatal, a member of the ICPA, the announcement hid the fact that the account details were deleted in a process initiated by the VAT.
For years, business owners have used bank accounts they share with their spouses for VAT refunds without any issues. Fatal was told by the VAT that a policy forbidding business owners from using a bank account shared with another person with a file had taken effect on January 1, 2021.
"After receiving the same letter regarding the lack of bank account details, I wondered about the meaning," Fatal said. "In response to my first request about two months ago, I was required to submit for my clients a certificate of account, which is a document that includes the account number and names of spouses, and I did so – although afterwards I received a demand to receive details of a separate bank account. "Most of my clients do not have more than one bank account," he said. "Why are spouses with a single bank account required to open another bank account and pay unnecessary fees only in light of an unreasonable VAT decision and arbitrary deletion of the correct account details?"
The ICPA was also unable to remedy the issue.
"I very much respect the relationship with the tax authorities, but I regret the governmental opacity especially at this time," said Fatal. "In front of my eyes is only a wide public of business owners and their representatives, accountants and tax consultants," he said. "I expect VAT to do the job immediately, without requiring receipt of documents from accountants and without an unnecessary preoccupation of the employed public and the re-updating of registration details that were proactively deleted."