The Israel Tax Authority ordered a one-week vacation in vacation apartments, and caught tax evaders. The Tax Authority conducted another audit of apartment lessors, with an emphasis on short-term rentals through websites like Airbnb and Booking.com. The operation, which included 58 audits in Tel Aviv, Jerusalem, Haifa, and Eilat, found that 33% of the apartment owners did not report income from their properties.
The operation was preceded by preparatory work, including making orders and tracing property owners. Additional operations are planned in this sector among owners of properties for short-term rentals, who will be audited.
In the course of the operation, six Tel Aviv apartment owners leasing their properties for short-term rentals through Airbnb and Booking.com who did not report their income to the Tax Authority were found. One of them, who rents out a luxury apartment, and did not report NIS 135,000 in income, told the Tax Authority auditors, "I report according to 10%; I didn't know it was business income." Another check by the Tax Assessment office of an owner of a short-term rental apartment showed that she did not keep books at all, and failed to report NIS 25,000 in income.
In Jerusalem, the auditors found four owners of apartments rented for short periods through AIRBNB and Booking.com who did not report their income to the Tax Authority. One of them, a foreign resident renting out a luxury apartment, failed to report NIS 144,000 in income. His response to the findings was, "I planned to open a file and report."
Owners of hotel rooms in Haifa renting them out for short periods were checked. Five of them were caught for failing to report their income to the Tax Authority. Most of them claimed they did not know that they were obligated to report.
Tax evaders were also found in Eilat, Israel's premier resort town. An enforcement campaign found that one residential property owner there, who reported no income, was offering two houses on short-term rentals through Airbnb and Booking.com for daily fees ranging from NIS 1,000 to NIS 3,000. It also turned out that this owner had not opened a file in the Tax Authority, citing illness and exhaustion as an excuse.
All the cases were transferred to the relevant Tax Assessment and investigative offices for handling. The campaign is a continuation of the Tax Authority's effort to comb the Israeli real estate and rental market and expose tax evaders in the sector, among other things by retrieving information on apartment rentals from websites.
Published by Globes [online], Israel business news - www.globes-online.com - on June 28, 2016
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