Foreign Bank Accounts Report

In recent years the United States has been increasing its enforcement efforts in regards to the economic activity of U.S. citizens abroad.

 

FATCA (Foreign Account Tax Compliance Act) requires banks around the world, including the Israeli banking system, to report assets and accounts of their American customers.

 

The directive requires all Israeli banks to report the names of account holders, their addresses and the amounts deposited in their accounts, and it is expected that Israeli banks will begin to transmit the information at the beginning of 2014.

 

Banks that will not cooperate with the U.S. authorities' demand to report this information will suffer damage to the Bank's assets (Israel's largest banks have extensive operations in the U.S.).

 

The purpose of the new legislation is to increase tax collection from U.S. citizens who have income outside the U.S. and to deter tax evasion.

 

The meaning of the legislation for U.S. citizens living in Israel, is that bank account holders with a balance that exceeded ten thousand dollars at some point during the year, are required to submit a FBAR - Foreign Bank Accounts Report.

 

Disclaimer: www.smartax.co.il does not advise on any personal income tax requirements or issues. Use of any information from this site is for general information only and does not represent personal tax advice either express or implied.