1. 1
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
The Global Combat Against Tax Havens
and Unreported Financial Accounts
Background to open discussion
Speaker: Hagi Elmekiesse
CPA and Advocate
International Tax Partner
Artzi, Hiba & Elmekiesse – Tax Solutions Ltd.
Tel Aviv, Israel
Premier International Associates
The 2009 Annual Meeting -Paris
May, 2009

2. 2
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
Artzi, Hiba & Elmekiesse - Tax Solutions Ltd. - Profile
Our team includes 15 highly experienced members, most
of them former Israeli Tax Authority’s professionals in all
tax areas, including:
 International taxation
 Domestic direct taxation
 Idirect taxation
 Social insurance
 Criminal tax law
Partners:
•Ran Artzi, CPA – Managing Partner
•Ishay Hiba, CPA and Jurist – Israeli Tax Partner
•Hagi Elmekiesse, CPA & Advocate –
International Tax Partner

3. 3
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
Artzi, Hiba & Elmekiesse - Tax Solutions Ltd. - Profile
The firm specializes in providing unique and tailor
maid tax solutions to complicated tax cases. Including:
• Pre-rulings before the various tax authorities
regarding local and worldwide issues;
• Efficient tax planning (domestic and international);
• Israeli Tax Authority assessments representation – in
all tax areas;
• consulting Returning Residents and New Immigrants
on their extreme tax benefits.

4. 4
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
The Global Combat - General
• The battle of the developed countries against tax
havens has a long history.
• The leading “warriors” are:
– OECD:
 Global Forum Working Group on Effective
Exchange of Information; and
 OECD's Center for Tax Policy and
Administration.
– Leading jurisdictions – mainly the US;
– G-20

5. 5
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
The Global Combat – OECD & G-20
OECD:
– 1998: OECD Report on Harmful Tax Competition (the 1998
Report).
– Exchange of information (OECD Model Tax Convention);
– Monitoring and Black List;
– OECD Agreement on Exchange of Information (2002).
G-20:
– Formation of common policies;
– Actual coordination between these leading economies;
– Currently focusing on: Switzerland, Lichtenstein, Luxemburg,
Monaco, Singapore and Hong-Kong (all recently agreed to
follow OECD standards).

6. 6
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
The Global Combat - IRS
IRS:
– Combat against certain financial centers;
– UBS Agreement – following IRS pressure:
 Disclosure of 250 taxpayers;
 2 US taxpayers were prosecuted;
 Possible disclosures of 52,000 additional
taxpayers;
 Legal steps in the US against UBS;
 780 million USD – fines paid by UBS;
 Possible US-Switzerland treaty amendments.
– Other banks are targeted by the IRS.

7. 7
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
The Global Combat –
Exchange of Information
• Growing pressure on “tax centers”;
• Exchange of information between leading economies
and “tax havens”.
• Recent parties to exchange of information agreements
- examples:
 Guernsey;
 Jersey;
 Bermuda;
 Isle of Man;
 Gibraltar;
 Cayman Islands;
 Liechtenstein;
 Andorra;

8. 8
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
The Global Combat – IRS “Amnesty”
6 Months “window of opportunities”
• IRS Commissioner’s formal announcement on
voluntary disclosure (March 2009);
• Incentives to taxpayers to “step-forward”;
• Standard fines and interest payment;
• No criminal procedures;
• Crack-down on unwilling and uncooperative tax-payers
in future (September 2009 - onwards).

9. 9
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
Cyprus – out of Russian “black-list”
Russia – Cyprus: New Tax Treaty Protocol (April 16, 2009)
• Recent Protocol allows Russia access to information
on taxpayers’ hidden accounts and entities in Cyprus;
• Cyprus will no longer be on Russia’s “Black List”;
• Cypriot internal law was amended accordingly –
Possible general application to other countries;
• Other treaty implications are expected to apply in 2014.

10. 10
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
Israel – Disclosure and Settlements
• Israel – tax reform of 1/1/2003: world-wide tax base;
• Tax Settlements in the International Tax Division:
– 5% gross tax rate (treaty country);
or
– 7.5% (non-treaty country).

11. 11
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
Israel – Disclosure and Settlements -
Trusts
• Israeli Taxation of Trusts
– Trust taxation provisions – effective 1/1/2006;
– 4 types of taxable trusts, even where only
marginal link to Israel exists;
– The various types of Trusts:
 Israeli Resident Trust;
 Foreign Resident Settlor Trust;
 Foreign Resident Beneficiary Trust;
 Trust Pursuant to a Will.

12. 12
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
Israel – Disclosure and Settlements of Trusts
• Special settlements to “old” trusts (which were
created before 1/1/2006);
• 4%, 6% or 10% tax from gross assets value;
• Last day to apply for a trust settlement:
30 June 2009.

13. 13
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
Israel – Significant New Tax Benefits
• Israel - a “limited” tax haven? Amendment 168:
– Benefits to Returning Residents and New Immigrants;
– Returning Residents - 10 years of residence abroad;
– Tax benefits:
 10-year full tax exemption on income/gains
from foreign countries;
 No reporting requirements on exempt income
or gains for 10 years;
 2007 to 2009 Returning Residents – only 5 years
of residency abroad are required.

14. 14
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
Israel –Tax Settlements
Tax Settlements – Current Practice
– Pre-Ruling – anonymous application allowed;
– Possible settlements in regional tax offices.
– Regional Assessing Officer has wide discretion.
– Criminal procedures may be avoided.

15. 15
 Artzi, Hiba
& Elmekiesse
Tax Solutions
Ltd.
7, Menahem Begin St., Ramat-Gan 52521, Israel
Phone: 972-3-6134111. Fax: 972-3-6133113
Cell: +972-52-5565872
E-Mail: hagi@ahe-tax.co.il,
Website: www.ahe-tax.co.il