Receiving Money From Abroad? Make Sure You Have Back Up Information.

Author:Dave Wolf & Co
Profession:Dave Wolf & Co

In the last couple of weeks we have been receiving frantic calls from our clients claiming that the banks in Israel are refusing to release money intended for the client unless showing proof of funds and a confirmation by their lawyers.

For an example, one of these calls came from a client of ours who lives in Europe, and who recently wired $40,000 to his Israeli grandson as a wedding gift. Both the giver and the recipient are non American citizens. The bank refused to transfer the money into the grandson's account unless it received an official document proving the source of the funds which had to be confirmed in writing by an Israeli lawyer.

The Bank of Israel recently sent Israeli banks a draft procedure requiring banks to receive from their foreign clients a declaration that they have paid the required tax on the income in their Israeli bank accounts in their country of residence.

In general, under the draft legislation, the procedure requires that every foreign resident customer (both new and existing ones) will have to present data about the source of his wealth and income, and declare that he has paid the legally required taxes in his country of residence. In addition, the client is required to sign and consent to waive his right to bank secrecy with respect to any other banking jurisdiction

This new request by the Israeli banks is another way to ensure that the money being transferred is "Kosher" as yet another way of combating against any potential money laundering issues and cooperating with the Israeli Tax Authorities ("ITA") to detect tax evaders.

As part of the increasing efforts of the ITA to expose unreported worldwide income of Israeli...

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