Tax Authority Uncovers Alleged Multi-Million Shekel Tax Evasion by Corporate Controller
Israel's Tax Authority is investigating two financial representatives for allegedly helping a major shareholder in a public company evade taxes on over 31 million shekels in dividend payments and owner withdrawals. The representatives are accused of misreporting dividends and failing to declare substantial cash withdrawals from a private company. The investigation became public Monday with searches and seizures, and the suspects were released under restrictive conditions with a gag order on their names.
הידיעה ב-6 שורות · תקציר של baba
- Two financial representatives are under criminal investigation for tax evasion related to a public company's major shareholder.
- The suspects allegedly helped their client conceal over 31 million shekels in dividends and owner withdrawals.
- Dividends were allegedly misreported to benefit from a lower 25% tax rate instead of 30%.
- Substantial cash withdrawals from a private company were allegedly not reported as taxable income.
- The investigation became public Monday with searches and seizures by the Tax Authority.
- The suspects were released under restrictive conditions with a gag order on their names.
Israel's Tax Authority has revealed a criminal investigation into two financial representatives accused of aiding a major shareholder in a public company to evade tens of millions of shekels in taxes. The investigation, led by the Central District Tax Authority's investigations unit, centers on allegations that the representatives helped their client conceal significant owner withdrawals and dividend distributions over several tax years.
The probe began with a routine audit by the Rehovot Tax Assessor's office, which uncovered concerning findings and apparent evidence of repeated non-reporting of funds withdrawn over years. The case was then transferred to the investigations unit, where it was discovered that the representatives allegedly assisted the controlling shareholder in filing personal tax returns for 2021-2023 without declaring all legally required income.
Investigators identified two primary schemes used to allegedly reduce the client's tax burden. Firstly, the representatives are suspected of misreporting approximately 16.5 million shekels in dividends. Instead of declaring them in a category subject to a 30% tax rate for controlling shareholders, they allegedly reported them in a field for ordinary shareholders, taxed at 25%. This maneuver is estimated to have cost the state over 800,000 shekels.
Secondly, the shareholder allegedly withdrew about 14.6 million shekels from a private company he owns in 2021 and 2022. Under tax law, such withdrawals are considered taxable income unless fully repaid to the company by the end of the following tax year. The suspects allegedly failed to report these substantial withdrawals as income in the client's tax filings.
The investigation became public on Monday when tax authority investigators conducted extensive searches, seizing documents and computer materials. The two representatives appeared in the Rishon LeZion Magistrate's Court, where they were released under restrictive conditions, and a gag order was placed on their names.
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