The Voluntary Disclosure Procedure is designed to encourage business owners, self-employed individuals, and private persons who have evaded taxes, whether knowingly or unknowingly, to regulate and accurately report their income to the Tax Authority and, of course, to pay their tax liabilities. Those who engaged in tax evasion and apply for the procedure are granted assurance that no criminal proceedings will be initiated against them. In practice, this allows them to regularize previously undeclared funds, avoid criminal prosecution, and seize the opportunity to start anew, managing their business in a proper and orderly manner.
The Israel Tax Authority has announced a one-time opportunity available until August 2026, enabling taxpayers to rectify irregular conduct vis-à-vis the state authorities (Income Tax and VAT). This applies to undeclared income in Israel, abroad, and even from digital currencies (cryptocurrencies), provided that the taxpayer meets certain conditions.
At Shtainmetz Aminoach & Co. CPA, we have handled hundreds of voluntary disclosure cases, and based on our extensive experience we can say with confidence that when a taxpayer comes forward voluntarily and reports, the Tax Authority generally refrains from imposing obstacles or criminal sanctions. Now, with the approval of the Attorney General, this is truly a golden opportunity to disclose, settle your tax liabilities, lift the burden off your shoulders, and move forward with your business smoothly, legally, and securely.
Here is everything you need to know:
What Is Tax Evasion?
Tax evasion (also referred to as tax fraud or concealment of income) is the use of illegal measures intended to reduce one’s tax payments. Under Israeli law, tax evasion constitutes a criminal offense punishable by actual imprisonment, and it should not be taken lightly.
By evading taxes, an individual not only breaks the law but also commits a moral offense against society as a whole, enjoying the benefits of public services without contributing to their cost.
Voluntary Disclosure Program 2025–2026
Following the growing state deficit since October 7, through “Iron Swords,” ongoing confrontations with Hezbollah, the “Am K’Lavi” operation against Iran, and more, the government has a clear interest that we at Shtainmetz Aminoach & Co. CPA have long emphasized: increasing state revenues. As a result, the Income Tax Authority has decided to reinstate the Voluntary Disclosure Procedure, which was previously in effect in 2019 and 2016.
Under this program, taxpayers (including individuals, self-employed persons, company owners, and holders of cryptocurrencies, both in Israel and abroad) are given, from 2025 until August 2026, the opportunity to report undeclared income without facing prosecution or criminal proceedings. Interest and linkage differentials are expected to apply. It is estimated that this decision will increase state revenues by approximately 1 billion NIS; in similar previous procedures, the government collected about 5 billion NIS.
Purpose of the New Voluntary Disclosure Track 2025–2026 and Conditions for Submission
As stated, the purpose of the Voluntary Disclosure Procedure is to encourage tax evaders to submit accurate reports and pay their tax liabilities to the state authorities, thereby reducing the national deficit. The new procedure allows those who have committed tax offenses to amend their reports and pay their debt to the authorities, including interest and linkage differentials. In return, the state undertakes not to initiate criminal proceedings against those applying for voluntary disclosure, provided they meet the following conditions:
- The disclosure must be honest and complete, and the applicant (the taxpayer) must fully cooperate with the Tax Authority regarding the voluntary disclosure request.
- No prior audit or investigation has been conducted in the taxpayer’s file.
- The Tax Authority, or any other governmental authority, the media, or the courts do not already possess prior information related to the voluntary disclosure.
- The applicant (the taxpayer) must pay, on time, the full amount determined as payable.
Please Note - If the voluntary disclosure request is not approved, the Tax Authority may not use the information provided by the taxpayer.
However, the Authority may use information related to the disclosure request if it was obtained through other means, or in cases where the tax was not paid, the request was not made in good faith, or part of the relevant information was concealed.
Therefore, we strongly recommend settling your tax liabilities as soon as possible!
Voluntary Disclosure of Undeclared Income
There are various types of income, yet in all cases there is a legal obligation to report every source of income to the Israel Tax Authority. For example: rental income from apartments or other properties. In 2025, with interest rates still high, property purchases in Israel have slowed (apart from real estate investors), leading to increased demand for rentals and, accordingly, rising rental prices. Please note: if you are renting out a property and receiving monthly rent exceeding 5,654 NIS (as of 2025), you must report this to the Tax Authority and pay any applicable tax liability.
Whether you are an employee or a business owner of any kind, if you have an additional source of profit beyond your regular income, you are obligated to report it to the Tax Authority. Such income may include proceeds from the sale of an asset, inheritance, lottery winnings, foreign real estate, and more.
From August 2025 until August 2026, the Israel Tax Authority is offering taxpayers a unique opportunity to settle undeclared income. At Shtainmetz Aminoach & Co. CPA, we have extensive experience from previous voluntary disclosure programs initiated by the state. We will guide you through the new 2025–2026 procedure, ensuring you achieve the optimal tax outcome—without criminal proceedings, as stipulated.
Application Tracks for the New Voluntary Disclosure Program 2025–2026
A voluntary disclosure request must be submitted to the authorized department of the Income Tax Authority using an online form available on the Authority’s website. There are two available tracks for the procedure (the standard track and the fast-track “Green” track):
- Assessment Track: In this track, an assessment process is conducted with a tax assessor from the time of submission until the procedure is concluded.
- Green Track: This track is intended to expedite the process in cases where the amounts involved are relatively small. Under this track, the taxpayer’s CPA submits an amended annual report, or, in cases where no report was filed at all, the report is filed as part of the voluntary disclosure procedure.
Within the Green Track, requests will be handled if they involve:
- Income derived from financial assets held in a financial institution outside of Israel, where the balance as of 31/12/2014 is less than 4,000,000 NIS, and no new deposits/transfers were made into the account during the disclosure period.
- Rental income from residential properties in Israel and/or abroad not exceeding 250,000 NIS per year.
- Income derived from digital assets not exceeding 500,000 NIS for the entire disclosure period, provided that the fair market value of all digital assets as of 31/12/2024 does not exceed 1,500,000 NIS.
The decision as to which track the request will be processed under is made by the Tax Authority once the request has been approved.
Dual Voluntary Disclosure Between Two Countries
Today’s world is highly connected and interlinked across different countries. At times, voluntary disclosure involves more than one jurisdiction (dual voluntary disclosure). For example, an Israeli citizen with income in the United States must report both in Israel and in the U.S., and equally important, must know how to pay taxes in accordance with the tax treaty between the two countries.
For instance: a taxpayer cannot pay tax in the U.S. if, under the Israel-U.S. tax treaty, the payment is due first to the Israeli Tax Authority. In such a case, the Israeli citizen must pay tax in Israel first, and if any balance remains, only that difference is to be paid to the U.S. authorities. At Shtainmetz Aminoach & Co. CPA, we are experts in both international taxation and voluntary disclosure, regularly providing our clients with dual and multi-country disclosure services, including in the U.S. and other jurisdictions.
When a taxpayer discloses income to the authorities of one country, there is cooperation with the other: the authorities of Country A inform those of Country B. Therefore, deep knowledge and experience in international taxation are crucial to properly allocate tax obligations between jurisdictions.
For example, if a taxpayer pays 100% of the tax liability in one country while nothing in the other, when, in fact, 70% should have been paid in one jurisdiction and 30% in the other, the matter remains unresolved and obligations remain outstanding. Similarly, if the taxpayer wishes to release funds from a bank, this will not be possible without presenting full reporting approvals from both countries.
Note: The new Voluntary Disclosure Procedure for 2025–2026 also applies to undeclared profits from all types of cryptocurrencies.
Voluntary Disclosure for Digital (Cryptocurrency) Assets
If you are among those who failed to report income from cryptocurrencies or did not report your digital wallet to the Tax Authority, now—until August 2026—is the time to initiate a voluntary disclosure procedure. This means reporting profits from Bitcoin, Ethereum, or any other cryptocurrency.
In recent years, Bitcoin has increased significantly in value, and holders of this and other digital currencies have enjoyed substantial financial gains. The Israeli Tax Authority has debated whether a virtual currency should be regarded as “currency” in the legal sense or rather as an “asset.” If it is considered currency, no tax liability arises from exchange rate differences; but if it is considered an asset, then any increase in value is subject to 25% capital gains tax.
Looking to bring your virtual funds into Israel? Through voluntary disclosure to the Tax Authority, you can declare and transfer your cryptocurrency funds legally. The Tax Authority also employs advanced technologies to identify suspicious crypto wallets. By applying for voluntary disclosure, you can resolve these issues and ease the burden on your mind. Proper crypto reporting requires expertise and technological tools to calculate actual profits—particularly if multiple wallets are involved, with transfers between them, requiring offsetting and accurate tracking of conversions. At Shtainmetz Aminoach & Co. CPA, we have the expertise and technology to manage voluntary disclosure for cryptocurrency assets, supported by a dedicated crypto department.
Cryptocurrency taxation is a complex field, as digital wallets do not always provide orderly records of profits or losses. In addition, an individual may own several wallets and engage in various transactions such as purchases, sales, conversions between different cryptocurrencies, withdrawals, and fluctuations in value.
Through the 2025–2026 Voluntary Disclosure Procedure, you can finally remove unnecessary concerns and properly report your cryptocurrency income to the Tax Authority.
Watch the interview with CPA and Attorney Shmulik Hirshfeld on Globes regarding the previous Voluntary Disclosure procedure:
To Whom Is the Voluntary Disclosure Procedure Submitted?
Online voluntary disclosure requests must be submitted to the Senior Deputy Director for Investigations and Intelligence at the Israel Tax Authority, who is the sole authority empowered to approve such requests. The online request must include all relevant information and documentation, along with a signed application form from the applicant.
If the request is approved, it will be transferred to the relevant authority (for example, a tax assessor or the Land Taxation Office). These authorities will determine the amount of tax to be paid, including linkage, interest, and any applicable fines, as well as the due date for payment of the tax liability.
The Voluntary Disclosure Procedure was first published in 2005. In 2014, in order to encourage applications, a temporary order was issued that remained valid until the end of December 2016. This order introduced two special tracks for voluntary disclosure: a fast-track procedure and an anonymous voluntary disclosure track.
Anonymous Voluntary Disclosure from Previous Programs
Anonymous voluntary disclosure was permitted under previous programs published by the state. Under the new procedure, approved by the Attorney General and valid until 31/08/2026, anonymity is no longer an option. However, as noted, if the Tax Authority does not accept the voluntary disclosure request, it may not use the information revealed.
In practice, the anonymous track in the past allowed taxpayers to apply without disclosing their identity. This track was intended for those who wished to know the amount of tax they would be required to pay before providing their personal details. A taxpayer who chose the anonymous voluntary disclosure track was not required to identify themselves when submitting the request, and identification was made only if they decided to proceed after the assessment was determined.
Voluntary Disclosure via the Short Track
The short track was designed for voluntary disclosure involving relatively small amounts of capital and did not permit anonymous applications. This track was relevant under previous voluntary disclosure programs and is now referred to as the Green Track. A voluntary disclosure request under the Green Track may be submitted when the total capital involved is relatively low.
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Frequently Asked Questions
Voluntary disclosure is a process provided by state authorities, allowing an accountant to submit it to the tax assessor at the Income Tax Authority and other state authorities. Through the submission of voluntary disclosure, tax evaders who have not properly reported their income can regularize their status, submit accurate and proper reports to the Income Tax Authority voluntarily, and, of course, pay their tax liability.
Any individual or company that has not reported taxable income or assets to the tax authorities can submit a voluntary disclosure request. It is important that the request is submitted before the Tax Authority initiates an audit or investigation against the applicant.
The request includes details of the unreported income or assets, supporting documents, and a declaration that the applicant is not under audit or investigation. Additionally, it must explain the reasons for the non-disclosure and provide the amounts on which taxes need to be paid. The submission of the request is usually done with the assistance of an experienced accountant.
Absolutely! Every Israeli citizen is required to report all their income without exception (from Israel, abroad, or cryptocurrency) to the Income Tax Authority. Failure to provide true and complete reporting constitutes a serious offense, which may result in actual imprisonment!
Taxpayers who have not properly reported all their income to the authorities benefit in two ways: first, by legitimizing the undeclared funds they have accumulated, and second, by avoiding criminal proceedings and prosecution.
In the eyes of the Income Tax and VAT authorities, there is no distinction between intentional tax evasion and unintentional oversight. The law applies equally to both cases.
There may be cases where voluntary disclosure applies to two countries (dual voluntary disclosure). For example, an Israeli citizen who is also a U.S. citizen or holds a U.S. green card and has income in the U.S. and Israel, or even income from just one of the countries, is required to report in both countries and pay taxes in both. There is a tax treaty between Israel and the U.S. to prevent double taxation, and the allocation of tax payments must be done correctly in accordance with this treaty.
Yes, inheritances and assets received from abroad must be reported if they generate taxable income in Israel. Voluntary disclosure allows for the regularization of reporting on these assets and prevents fines and legal proceedings.
Following the “Iron Swords” war that began on October 7, 2023, the state entered a growing deficit, which continues to deepen by the day. As a result, the government decided to launch a new Voluntary Disclosure Program in August 2025, similar to those implemented in 2019 and 2016. State authorities anticipate that revenues from the new program will amount to several billion NIS.
Yes. As of August 2025, the Israel Tax Authority, in collaboration with the Attorney General, officially launched the Voluntary Disclosure Program, which will remain in effect until 31/08/2026. Now is the time to get things in order, do not take this lightly. Contact us, and we will be glad to assist you with the voluntary disclosure procedure as well as with additional tax and accounting matters.
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