In Pursuit of Tax Evaders, Tax Authority Gets List of 8,000 Israelis With HSBC Accounts

Officials will use documents to probe for tax violations in widening crackdown on unreported capital.

The HSBC headquarters.
Reuters

The Israel Tax Authority said Monday it had received a list of some 8,000 Israelis who have bank accounts in the Swiss unit of British-based HSBC, marking a major step forward in its pursuit of tax evaders.

“Getting the list is one of the most significant results of the fight against undeclared capital, and it adds to legislative and other measures to obtain information on bank accounts and assets held by Israelis abroad,” said Moshe Asher, the authority’s director.

The list was provided by French authorities18 months after the International Consortium of Investigative Journalists, including Haaretz’s Uri Blau, first revealed it. That list appears to have had fewer names, containing 6,200 accounts for the years 1988-2007 holding some $10 billion in the final two years of the period covered.

The accounts on the ICIJ list were held in the name of 6,550 Israelis, making Israelis the sixth-largest national contingent among 203 countries in the list.

Israelis are allowed to have foreign bank accounts but are required to report how much they have deposited in them, as well as any profits they earn from interest, dividends or capital gains.

“In the first phase, which is expected to take several months, the Tax Authority will examine and classify the material and compare it to tax filings those Israelis made to the Tax Authority,” Asher said.

HSBC early last year acknowledged “past compliance and control failures” that may have allowed some customers to evade taxes, and since February 2015, Israel’s tax authority had been working to obtain the list of Israelis with accounts at HSBC Switzerland.

Past arrests

Two years go, Israeli tax officials got a hold of a similar list continuing hundreds of names from the Swiss bank UBS as part of a probe into the activities of Roni Elias, a UBS banker who worked with Israeli clients. The probe led to 32 arrests.

Israel is offering immunity from criminal prosecution to people who voluntarily disclose they have an account abroad until the end of the year. So far, it has received 5,360 applications relating to 18.6 billion shekels ($4.9 billion) of previous undisclosed funds.

Those getting amnesty remain liable for back taxes and penalties, which the authority said had so far reached 650 million shekels. Meanwhile, the Knesset in March approved a law that makes serious tax violations tantamount to money laundering and liable to much more severe penalties, including confiscation of property.

Among the names revealed as having accounts by the ICIJ were tycoons on the HSBC list include Lev Leviev, who controls Africa Israel Investments, and his wife Olga. Shlomo Nehama, who was chairman of Bank Hapoalim from 1998 until 2007, was linked to an account that in 2007 held more than $104 million.

Appearing on the list doesn’t mean the holder didn’t report the account to Israeli tax authorities.