Customs and Excise

Import taxes include customs, VAT, purchase tax and other taxes imposed in accordance with the Israeli law. Tax billing upon import of goods is not carried out according to assessment, but according to billing or requirement. Import taxes are indirect taxes. Purchase tax is an indirect tax, since it is considered a consumption tax imposed on groups of products and calculated at a certain percentage of the wholesale price of various products.

Purchase taxes in Israel were imposed in 1952. The law authorized the Minister of Finance to impose a tax on specific products in addition to other taxes imposed on different products. Purchase taxes shall apply to such products, as vehicles, mobile phones and electronic products, such as a TV-set. Products required for continuous consumption shall not require payment of purchase tax. There are people, who commit Customs and Excise offences, such as in case of an illegal smuggling of products to Israel, submitting false information, showing price reduction or increase in import and export, avoiding the purchase tax, etc. Person avoiding reporting to the Customs authority about an expenditure or income, or belongings that require reporting, may receive a heavy fine and a criminal file will be opened against him.

What commission imposes financial sanctions?

Discussions held regarding a person, who concealed or did not report goods or funds he transferred for and to Israel, are conducted by the Financial Sanctions Committee, which is composed of three members. This committee is summoned within several days from the moment the funds are arrested, in order to conduct a hearing for the funds’ owner and make a decision regarding the volume of financial sanctions to be imposed on the person, who violated the law. The office, in which the Financial Sanctions Committee is located, handles additional offences, such as submission of false documents, avoiding purchase tax payment, smuggling goods to Israel, etc.

It is important for any person planning to import goods from abroad to examine the laws in general and the local customs law, in particular. It is important not to rely on the exporter to check the Israeli customs laws, similar to the fact that the importer was not required to check the laws of the country, from which he imports the goods.

Tax Authority is interested to encourage enterprises or private businesses that violated tax laws to correct their reports and submit true data. Tax Authority, along with the State Attorney’s Office, are willing to undertake that criminal proceedings will not be conducted against those who provide a voluntary disclosure.

What is a voluntary disclosure?

Those willing to declare previously undeclared goods can provide a voluntary disclosure, provided that it is carried out in good faith. Investigation and examination will not be conducted upon a voluntary disclosure. Tax Authority may not approve a voluntary disclosure application in case there is information available regarding the voluntary disclosure application and even indirectly, including, regarding the spouse of the applicant and companies under their control. In exceptional cases, for example, cases that involve irregular personal reasons, such as a serious illness, the Tax Authority may approve the voluntary disclosure application.

Voluntary disclosure application should be submitted to the Senior VP Investigations and Intelligence at the Tax Authority and he will be authorized to approve this application. If application was submitted to another entity at the Tax Authority, that entity should transfer the application to a competent entity. It should be noted that disclosure should be honest and include all the required information.

Are you under investigation regarding customs and excise offences?

In such case, you should contact attorneys engaged in criminal law, specializing in customs and excise offences, such as the Ronen Oren &Co. Law Office, in order to receive a solution and legal assistance, from the arrest and authority investigation until completion of criminal proceedings. Ronen Oren & Co. Law Office maintains the privacy of its clients and greatly assists them towards a successful result in court.