Bibi's Jersey account: legal but problematic

Stella Korin-Lieber

Netanyahu, a former businessman, should be fully transparent and lead the transparency revolution that is so desperately needed.

The fact that Prime Minister Benjamin Netanyahu, or any other person, sets up a company in a location known as a tax haven, a place where less taxes are paid, is perfectly proper - so long as he acted, and acts, according to the law, and so long as he carried out legal tax planning and filings.

But a prime minister and finance minister, in contrast to anyone else, has a further obligation: the public duty of full transparency. This is required of Benjamin Netanyahu now that "Globes" has exposed these matters.

Tax planning is not a crime by definition, because otherwise it is not "planning". Registering a company and transferring income to places with lower tax rates is anchored in Israeli law, international tax laws, and OECD guidelines. Nonetheless, the establishment of a company in a tax haven requires, under the income tax code, filing of "reportable tax planning". So long as Netanyahu filed or is filing with the Tax Authority, pursuant to Israeli law, there is no fault in his conduct, assuming that all the circumstances and facts on which his filings are based are accurate.

In other words, the dates are correct, the amounts are correct, the documents are genuine, the assets exist and are accurately described. And yes, if paid or is paying to others from this account, income owed, he must, by law, deduct tax at sources, otherwise he has acted illegally.

A public problem

Legally all is proper. Conceptually? It should be said to Netanyahu's credit that he has repeatedly said that taxes in Israel on individuals and companies are too high. He has acted in every capacity in his years in government to lower taxes in Israel. This policy was halted in the current crisis by the social protest and the Trajtenberg Committee, and Netanyahu took steps to raise taxes on individuals and companies.

The main problem is public. Is it proper for a man who was prime minister, and later finance minister and again prime minister and minister for the economy, a man who has run Israel's economy for 15 years, to use a tax haven? This definitely can look bad.

Publicly, therefore, purity of mind, clean hands, and an irreproachable reputation are of the essence, and even if Israeli law does not require senior public figures to file reports and maintain transparency, Netanyahu, a former businessman, should be fully transparent and lead the transparency revolution that is so desperately needed. That is why the prime minister should answer the public, beginning with the questions that "Globes" has asked today.

"Globes" 12 questions are:

  1. When did Netanyahu open the bank account?

    2. Does the account still exist and is it active?

    3. If not when was it closed?

    4. Was the account and all the assets in it reported according to the law to the Israel Tax Authority including reports of corporations held in the account and trustees?

    5. Was an annual report filed as required?

    6. Were taxes paid in Israel on time?

    7. Was this done, on whatever date, in back payments, and/or was there a settlement paid retroactively?

    8. Was Netanyahu investigated and di he pay a fine?

    9. Were the payments made to others from the account liable to income tax at source?

    10. Did Netanyahu file a declaration of wealth as required?

    11. As a person who has served as prime minister and finance minister is it not improper to hold an account in a tax haven?

    12. Did Adv. Isaac Molho - in the past or today - receive money for his work as an emissary?

    Published by Globes [online], Israel business news - www.globes-online.com - on January 15, 2014

    © Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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