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Tight criticism for small businesses? "The tax authority wants to scare" - Walla! Of money

2022-06-21T06:17:17.090Z


The tax authority is setting up a new unit that will deal specifically with small businesses and try to improve tax collection through them. Expert: "In my opinion, the tax authority wants to provoke a psychological effect"


Tight criticism for small businesses?

"The tax authority wants to scare"

The tax authority is setting up a new unit that will deal specifically with small businesses and try to improve tax collection through them.

Tax law expert: "In my opinion, the tax authority wants to provoke a mainly psychological effect. It makes more sense to focus on the big sharks."

David Rosenthal

20/06/2022

Monday, 20 June 2022, 15:43

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An alarming news for tens of thousands of small business owners

: The Tax Authority is establishing the "NSA" unit (national bookkeeping), a unit dedicated to examining the income reports and account books of small businesses in Israel, in contrast to the situation used until today, in which business audits were conducted Small by regional tax officials, who themselves have decided how to allocate their resources to address these issues



. The two years submitted to the Assessing Officer are indeed examined, and when it appears that



the

Assessing Officers focus their efforts among taxpayers whose business turnover exceeds NIS 10 million per year.

"Undercover Buyers"In small businesses and in the field checking their bookkeeping.

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Will they increase enforcement or is it just an act of intimidation?

Tax Authority (Photo: Flash 90, Olivia Fitoussi)

Attorneys Kobi Goldman and Michael Kashash, who deal with tax law and violations of the Anti-Money Laundering Law, note: "If at all. It makes much more sense to focus on the 'big sharks', certainly in the economic reality of Israel in 2022 when many businesses have not yet recovered from the corona."



Therefore, Advocate Goldman reassures, “it is much more likely that the PA has been‘ frightened ’by newspaper headlines about the apparent focus on large businesses and low collection rates, than actually intends to make a fundamental change in their policies.

It is also important to remember that it is not the Tax Authority that adds standards, or announces a change in enforcement policy.

"This is a shift in manpower, and in my opinion the effect that the PA is seeking to achieve is mainly psychological."



Adv. Goldman further emphasizes: "Small or small business owners, who are responsible for 40% of the business turnover in Israel, must not act complacently.

One of the purposes of the tax law enforcement mechanism that the tax authority believes in is to deter the public, in the act of doing an act 'for the sake of seeing and being seen'.

Any entanglement with the tax authority, even in a matter that is supposedly minor and trivial, is not a trivial matter.

"From my experience in managing tax files of medium and large companies, I can safely say that once the authority enters the process, it does not fold easily."

You did everything right?

It is still better to consult a professional

Adv. Kobi Goldman (Photo: Amit Shaal)

Adv. Michael Kashash (Photo: Amit Shaal)

In view of the new initiative of the Tax Authority and in light of their experience in conducting significant and complex proceedings of disqualification of books both in income tax and VAT, attorneys Goldman and Kashash add that "a taxpayer or dealer, large or small, must consult a professional Criticism, even if he is absolutely certain that there was no flaw in his conduct



. Substantive deviation 'has different meanings in income tax on the one hand and value added tax on the other, however, the word' substantial 'may be misleading, because the ruling stated that it is sufficient that the defective or missing entry in the books (even if it seems negligible) burdens or does not allow the tax clerk to track Or effective control over some parts of the business, so that the deviation is considered 'substantial'. "



According to Advocate Kashash, “the consequences are different and the conduct should be seriously considered, each case on its own merits.

For example, as a rule, a dealer or assessee can appeal a decision to disqualify the books before a special book admissions committee or appeal before the court.

The choice of the tribunal and the timing of the filing of the appeal or appeal, have horizontal implications and these should also be considered in light of parallel decisions made by the tax authority in their case, for example in determining



the assessee. " It is permissible to keep books in accordance with the instructions for keeping notebooks, and that the end is an act in thought first. "

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Source: walla

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