by Alon Kaplan, Lyat Eyal and Susanna von
The recent economic crisis left
many countries with an immense "hole" in their treasury. Many states
were looking for ways to fill their economic gaps and many increased their
pressure on low tax jurisdictions. The Organisation for Economic Cooperation
and Development (OECD) took measures against the worldwide tax evasion. It put
countries like Switzerland and Liechtenstein on grey lists for not fully
implementing the OECD standards. This new trend to combat undeclared assets
found its peak in the case of UBS Switzerland and the U.S. Internal Revenue
Service (IRS) and further resulted in the following cases: Germany had bought a
stolen CD with data from a Swiss branch of HSBC with account information of
German taxpayers. In Italy, the government offered a tax amnesty that uncovered
EUR 100 billion, of which EUR 5, 6 billion went to the Italian treasury.
Israel with its active economy and modern state, as part of the global village,
took a risky stand almost immediately prior to the financial crisis. In 2003,
it overhauled its tax system from personal taxation to global taxation,
followed by the Taxation of Trusts Law, and more recently added the New
Immigrants and Returning Residents Law.
These reforms have made Israel one of the most advantageous jurisdictions to
which to immigrate and do business. The Israeli economic environment is
particularly interesting for high net worth individuals who might wish to do
business in Israel, or to relocate and reside there.
2008 Israeli Tax Reform. In celebration of Israel's 60th anniversary, a new Tax
Reform for New Immigrants and Returning Residents was approved by the Ministry
of Finance. (Amendment 168. 9 September 2008, "The New Immigrants
Law"). The New Immigrants Law grants tax benefits to new immigrants and
returning residents to encourage immigration to Israel to stimulate the economy
and population. Amendment 168 is revolutionary and creates an advantageous
business environment for new immigrants and returning residents.
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Alon Kaplan heads
the Alon Kaplan Law Firm in Tel Aviv, is a notary in Israel, and a
member of the bar in New York and Frankfurt. His main practice areas include
trusts and estates, international taxation, private banking, corporate law,
agency and distributorships, and real estate law. Mr Kaplan is the president of
the Society of Trust and Estate Practitioners in Israel, and a seven-year
member of the STEP Council in London. He is the editor of several Kluwer law
and business guides, and writes widely on trusts.
Lyat Eyal practices international law and trusts and estates law at the
Alon Kaplan Law Firm. She writes in the area of trusts and taxation in Israel.
Susanna von Bassewitz holds a Master of Law from the University of
Zurich and works for the Alon Kaplan Law Firm.