Israel signed an international convention designed to combat tax evasion Tuesday, making it the 91st country to join.
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The Multilateral Convention on Mutual Administrative Assistance in Tax Matters was developed by the Organization for Economic Cooperation and Development and the Council of Europe in an effort to tackle tax evasion and avoidance.
Israel signed the pact as part of the Finance Ministry’s decision to crack down on overseas tax evasion, and as part of Israel’s commitment to meet international standards regarding tax enforcement.
The convention, originally formed in 1988, was expanded beyond OECD member nations in 2010, at which point all countries were encouraged to join.
Israel was the only OECD member nation that had not signed.
Yet Israel agreed to only parts of the convention – those regarding direct taxes, namely income tax, corporate tax and real-estate tax – and does not wish to take part in clauses dealing with national insurance, or regarding assisting tax audits abroad, assisting in tax collection or transferring documents, according to the Finance Ministry’s State Revenue Administration.
As part of the convention, member nations assist each other by exchanging data needed for tax investigations and can carry out simultaneous audits, among other measures.
“Today’s signing is a further confirmation that Israel is dedicated to the fight against offshore tax avoidance and evasion, and aims to crack down on illicit financial flows,” said OECD Secretary General Angel Gurria after a signing ceremony with the participation of Israel’s ambassador to the OECD, Carmel Shama-Hacohen.