The diamond and precious stones sector for a long time have encountered difficulties in Israel in reporting and regulating undeclared assets, as well as the taxation of the day-to-day business. These have been subject in the past to many rather unusual ad-hoc arrangements between the sector and the Israel Tax Administration ("ITA"). All this may now come to an end, as the ITA announced on December 18.
The ITA stated that it recently reached an understanding with the Israeli Diamond Exchange and the Israeli Diamond Industry Association, under which, as of 2017, the current taxation principles will be amended to better fit the industry. These include, among others, valuation at cost, and special booking for inventory.
In preparation for the forthcoming legislative amendments, the ITA announced that applications for voluntary disclosures by individuals which are, or were, active in the diamonds and precious stones industry, will be possible under the same framework currently applicable to the general public, subject to special principles.
Application for voluntary disclosure on an anonymous basis is possible only until the end...