Israel Grants Six-Month Extension for Partnership Registration Deadline
Translated & summarized from Globes by baba
Israel's Registrar of Corporations has extended the deadline for unregistered partnerships to register until March 31, 2027, following an appeal from the Institute of Certified Public Accountants. This extension comes after the Registrar issued thousands of warning letters and amid criticism from the State Comptroller regarding lost tax revenue due to non-compliance. The move aims to allow businesses more time to comply with registration requirements and avoid sanctions.
The story in 5 lines · by baba
- Israel extended the deadline for unregistered partnerships to register until March 31, 2027.
- The Registrar of Corporations sent 22,370 warning letters to unregistered partnerships before the extension.
- The State Comptroller reported that non-compliance leads to hundreds of millions of shekels in lost tax revenue annually.
- The Institute of Certified Public Accountants requested the extension, citing a lack of prior consultation.
- The enforcement initiative has already resulted in a significant increase in partnership registrations.
Israel's Registrar of Corporations has extended the deadline for unregistered partnerships, including law firms, accounting firms, and medical clinics, to register by six months, pushing the deadline to March 31, 2027. This decision follows an investigation by Globes and a request from the President of the Institute of Certified Public Accountants. The Registrar had previously sent out 22,370 warning letters to unregistered partnerships, threatening sanctions and reporting to the Tax Authority if they did not complete their registration within 45 days.
The move to enforce registration stems partly from a scathing report by the State Comptroller, which criticized the Registrar of Partnerships for failing to enforce registration requirements over the years, leading to an estimated loss of hundreds of millions of shekels in tax revenue annually. The Comptroller's report highlighted that partners in unregistered partnerships conducting multi-billion shekel deals often failed to declare their partnership status or underreported their income.
Following the Globes report, Chen Schreiber, President of the Institute of Certified Public Accountants, appealed to the Registrar of Corporations, Shuli Avni-Shoham, requesting a freeze on the 45-day countdown and a halt to enforcement proceedings until professional discussions could be held. Schreiber and Daphna Ravid-Barzilai, Vice President and Chairwoman of the Committee for Non-Profits, expressed surprise at the warning letters being sent without prior consultation, noting the uncertainty and resource drain this caused for accountants representing these businesses.
In response, Michal Shmueli, Deputy Head of the Corporations Authority, informed Schreiber that the request was granted, extending the registration deadline to March 31, 2027. Shmueli stated that the Registrar of Corporations is obligated to enforce the Partnership Ordinance, especially when a clear legal provision is not being implemented. She emphasized that while the Authority values cooperation with the Institute of CPAs, this dialogue does not preclude enforcement of the law. Shmueli also noted that the enforcement initiative has already led to a significant increase in partnership registrations, which she believes is a beneficial step for the market, promoting normative regulation and protecting businesses and their representatives from future legal and bureaucratic exposure.