Following up on a pair of raids on Diaspora Jews living in Tel Aviv and Herzliya Pituach, the Tax Authority is focusing on the port city of Ashdod further south on the Mediterranean coast.
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The Tax Authority said Sunday that its agents had raided some 200 luxury homes owned by foreign residents in the city’s marina area as well as in the Yod Zayin quarter on the city’s southern edge. The operation took place on Wednesday.
The information collected in the raids will be analyzed, and overseas property owners who have not been reporting their rental income to the Tax Authority will be called in for questioning, said Iris Omer, the tax assessor based in nearby Ashkelon.
Dozens of teams were dispatched, mostly to rented homes, where the residents were asked to produce their rental agreements. About 30 tenants of apartments owned by overseas residents complied immediately and provided the documentation. Another 80 were asked to provide missing information within the next several days. The plan now is to contact the tenants who were not at home during the raid.
The Tax Authority is cracking down on tax avoidance by Diaspora Jews taking advantage of a 2003 law that exempted new immigrants and returning Israelis from taxes on foreign assets or the need to report foreign assets for their first five years in the country. In 2008, an amendment to the Income Tax Ordinance extended the benefit to 10 years. Officials hope to convince lawmakers to at least end the reporting exception starting next year, although a previous attempt to do so failed to win enough support in the Knesset.
At one rental apartment in the marina neighborhood, tax agents discovered a wig business where an inspection of business records allegedly found a NIS 550 sale that had not been recorded on the books.
Earlier that day, tax authorities raided the Ashdod open-air market, where about 50 stalls came under scrutiny. Authorities say they found evidence at 40% of stalls that income had not been recorded. Some of the business owners at the stalls had not opened a file with the Tax Authority.
As was the case in tax raids elsewhere in the country, at the Ashdod market, some stall owners fled and left their businesses unattended. The local tax office that handles collection of value-added tax was enlisted to help find the absent merchants.
The raid on the Ashdod market is part of the government’s wider crackdown on tax evaders and black-market traders.