Accountant Arrested for Allegedly Hiding ₪60 Million Stock Sale for Client

An accountant from Rosh HaAyin was arrested on suspicion of failing to report approximately ₪60 million in income from a client's stock sale on the client's personal tax return, thereby allegedly saving the client about ₪1.8 million in surtax. Shlomo Tzedekiah was brought before the Rishon LeZion Magistrate's Court and released under restrictive conditions. The investigation, led by the Tax Authority's Central Investigations Unit, is ongoing.

The case reportedly stems from an exit deal where Tzedekiah's client, a major shareholder in an innovative technology company, sold their shares to an American firm. Authorities suspect Tzedekiah was involved in multiple capacities: advising the client on the deal, handling the client's annual tax report, and managing the capital gains declarations for the sale. Despite this, the proceeds from the stock sale were allegedly omitted from the client's tax filing.

According to the Tax Authority, a computer analysis by the intelligence department of the Investigations Division uncovered the discrepancy. The review indicated that between 2023 and 2024, the client received approximately ₪60 million from the stock sale. The funds were transferred via a trustee who withheld 30% tax at source, informing the client that this was an advance payment and not the final tax obligation.

The core of the suspicion lies in the surtax. While the 30% withholding tax covers most of the capital gains liability, an additional 3% surtax applies to taxable income exceeding a certain threshold set by the Income Tax Ordinance. For 60 million shekels, this 3% amounts to roughly ₪1.8 million, the sum allegedly not paid. The investigation included searches, evidence seizure, Tzedekiah's interrogation, and testimony from other involved parties.

Surtax is an additional 3% levied on annual taxable income above approximately ₪720,000, applicable to all income types, including one-off events like stock sales or lottery winnings. As of 2025, an additional 2% applies to capital gains above the threshold, meaning large exits could face up to a 5% surtax on top of regular capital gains tax. The issue is that surtax is not automatically withheld; individuals must pay it through their annual tax return, a step often missed by those who believe the initial withholding covers their entire tax liability. The Tax Authority views this omission more seriously when committed by an accountant who managed the transaction, seeing it as more than a simple error. This case is part of a broader enforcement push by the Tax Authority, targeting various entities and individuals.