The secret department has 20 Hebrew-speaking employees, and is hiring five more to investigate tax evasion.
The only “department” ostensibly close in character to this secret French department is a new department established in the US Internal Revenue Service (IRS) for dealing with cases of Israelis, American-Israelis, and Americans with assets and money in Israel. This US department, however, resulted from the Foreign Account Tax Compliance Act (FATCA) signed by Israel and the US, in which huge amounts of information are transferred by the countries about their taxpayers, and someone has to handle that information. This was not the purpose for which the department was set up in the French tax authority.
The French department was established to handle French Jewish tax evaders, and hired employees with professional experience and a profound understanding of Israeli law in order to examine whether Jews were using these laws to evade tax in France. The aim of the department is to catch French tax evaders using Israel as a tax shelter.
Examining real estate deals
An international lawyer specializing in taxation who is familiar with the secret department says, “It is very, very irregular to hire 20 Hebrew-speaking employees, or any other language, in a foreign tax authority. Most tax authorities have one or two Hebrew-speakers, and there are English or French-speaking employees in Israel for the purpose of signing conventions and conducting relations with the tax authorities of other countries. Every tax authority has employees that speak a foreign language, but hiring 20 or more Hebrew-speaking investigators is very irregular.”
The lawyer adds that he learned from his acquaintance with the department and its employees that some of the employees hired previously lived in Israel. “They hired Hebrew-speaking French people, some of whom previously lived in Israel and moved back to France,” he told “Globes.”
According to information obtained by “Globes,” as part of the department’s activity, its employees take out Land Registry extracts in Israel for the purpose of examining deals contracted in Israel and reaching French residents who have acquired properties here. The investigators have mapped the main streets in various cities in Israel, including Tel Aviv, Herzliya, Ra’anana, Netanya, and Jerusalem, in which many purchases by Jewish residents of France take place. They have obtained Land Registry extracts and examined the particulars of a deal in order to detect foreign passport numbers. The investigators cross-referenced the information with information in their databases and the reports by those French Jews about their assets and income. In cases in which it was found that the person did not report the properties he bought in Israel, he was also summoned for questioning.
Sources inform “Globes” that a French Jew recently went to the secret department for an “audit” without knowing exactly what was to be discussed. For safety’s sake, he took his lawyer with him – a fact that proved extremely important for him. During the discussion about his declarations of his assets and funds, the questioners very quickly presented a Land Registry extract including all of the French Jewish client’s housing units in Israel. The discussion took place, and at the end, the lawyer wondered in what framework the new investigation was taking place. A seemingly innocent casual conversation in the corridor with one of the investigators revealed the amazing fact that a special department for dealing with French Jews and their tax evasion was involved.
Targeting immigrants to Israel from France
Through the special division, in addition to mapping the properties of French people in Israel, the tax authority in France has begun direct interrogations of Jewish residents of France who are in the midst of immigrating to Israel, and examining whether they possess money or assets that they did not previously declare, and whether this is the reason why they decided to immigrate to Israel.
According to figures from the Israel Ministry of Immigration and Absorption, immigration from France has increased dramatically in recent years. 1,211 new immigrants arrived in Israel from France in the first half of 2017. A study conducted at Bar-Ilan University showed that the economic benefit for the Israeli economy from the absorption of Jews from France would reach $65 billion. The study assumes that 100,000 immigrants will arrive from France by 2026.
These figures are surprising to no one. Massive purchases of properties in Israel by French people have been spoken of for years, some by immigrants and some not, and a number of international investigations were opened against French people on suspicion of tax offenses and evasion on an enormous scale in France and laundering money in Israel through real estate purchases. These developments apparently attracted the attention of the French tax authority, which decided to target French Jews.
The sources also told “Globes” that the French tax authority is one of the main tax authorities that contacts the Israel Tax Authority in order to obtain information about French residents with exceptionally large assets in Israel, compared with other countries, but many of the requests are rejected. “They call the Israel Tax Authority almost every day with requests for information about some person or other, but many of the requests are rejected, because they do not meet the conditions of the conventions on exchanges of information. They are just fishing,” says a source involved in information exchanges between the two countries.
The French embassy in Israel said in response, “In the framework of the campaign against tax evasion, the authorities in France conduct investigations concerning individual cases, in accordance with the international agreements. The authorities in France deny the existence of a special department. It is extremely important to state that the things that were written are false.
“Taxes in France are calculated according to risk considerations. There is therefore no connection whatsoever to the national affiliation or ethnic origin of taxpayers. Next year, automatic exchanges of information are scheduled between OECD member countries.”
Published by Globes [online], Israel Business News – www.globes-online.com – on December 28, 2017
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