PART TWELVE: GENERAL PROVISIONS
Appointment of executive authority
229. For the proper implementation of the Ordinance the Minister of Finance may
appoint a Director, Assessing Officers and other officers or persons, all
according to the need.
Powers of the Director 246
230. The powers of an Assessing Officer shall also vest in the Director.
Order to appear
230A. If a person was lawfully required – on at least two occasions at least 30 days,
but not more than one year apart – to appear before the Assessing Officer,
and if he did not do so and did not inform the Assessing Officer of reasonable
grounds for his nonappearance, then a Judge or Registrar of a Magistrates'
Court may, on the Assessing Officer's application, make an Order that
obligates him to appear before the Assessing Officer at the time and place
stated in the Order.
Obligation of confidentiality
231. (a) A person who has an official position in the implementation of the
Ordinance or is employed in its implementation must regard all
documents, information, returns, assessment lists or copies thereof,
which relate to the income or to an item of the income of any person, as
secret matter and as a personal confidence, and he must treat them as
(b) Notwithstanding the provisions of subsection (a), a man or a woman is
entitled to the disclosure of every particular in the return submitted by
his or her spouse under section 131 or under section 135, and also to
disclosure of the amount of income determined by the Assessing
Officer or the Court, all in respect of the period during which they were
married and lived together.
Income tax employee shall not be required to reveal a secret
232. A person appointed under the provisions of the Ordinance or employed in its
implementation shall not be required to show to a Court any return, document
or assessment, or to divulge or communicate to a Court anything that came to
his knowledge in connection with the performance of his duties under the
Ordinance, except to the extent necessary for the implementation of
provisions of the Ordinance, or with the intention to bring action for an offense
related to income tax, or in the course of hearing such an action.
Publication of list of assessees
233. (a) The Minister of Finance may publish a list of all assessees in a manner
and in a place to be determined by him, and in it shall be specified the
amount of chargeable income of each in a certain tax year, as stated in
the return made by him or as determined by the Assessing Officer or by
the Court, all as the case may be; if a change occurred in the said list in
consequence of an objection or appeal lodged by an assessee, then
the list shall be corrected accordingly on the assessee's application;
every person is entitled to inspect the list that was published as
aforesaid at prescribed times and places and also to receive a certified
copy of all or of part of the list against a prescribed fee.
(b) Notwithstanding the provisions of subsection (a), the Minister of
Finance may – with approval by the Knesset Finance Committee –
refrain from including a certain category of assessees in the list of
assessees that is to be published as aforesaid.
Penalty for disclosing an income secret
234. If a person has possession or control of documents, information, returns,
assessment lists or their copies, which relate to the income of a person or to
a particular of his income, and if he at any time communicates or tries to 247
communicate aforesaid information or any contents of those documents to a
person to whom the Minister of Finance did not permit him to communicate it,
or if he communicates it not for purposes of this Ordinance, then he shall be
liable to six months imprisonment or to a fine of NS 12,900.
Restrictions on duty to give information
235. (a) Statutory provisions that obligate to deliver information about another
person's property or income, other than a said provision under the
Statistics Ordinance [New Version] 5732-1972, shall not apply to any
person who performs an official function or is employed in the
implementation of the Ordinance, unless the Ordinance expressly so
(b) Notwithstanding the provisions of subsection (a), it is permitted to
disclose information to the National Insurance Institute under the
provisions of section 384A of the National Insurance Law [Consolidated
(c) Notwithstanding the provisions of subsection (a), when an Order has
been made under section 60A of the Bankruptcy Ordinance [New
Version] 5740-1980, then it is permitted to reveal to the Official
Receiver or to the Court, within their meaning in the said Ordinance,
returns, information or documents specified in the said section and
according to its provisions.
(d) The provisions of sections 231, 232 and 234 shall apply, mutatis
mutandis as the case may be, to every person who performs an official
function in respect of information he received under this section –
(1) in the implementation of the National Insurance Law
[Consolidated Version] 5755-1995;
(2) in the implementation of the Bankruptcy Ordinance [New Version]
235A. For purposes of sections 235B to 235E:
"professional secret" – communications between a client and an advocate,
whether oral or written, which is substantively connected to the professional
service rendered by the advocate to the client, including records prepared by
the advocate for his own use, on condition that they are substantively
connected to the said professional service;
"privileged document" – a document that includes a professional secret;
"Court" – the District Court, in whose area of jurisdiction is located the office
of the advocate who claims privilege;
"judge" – the president or relieving president of a Court.
Power to demand documents from advocate
235B. Notwithstanding the provisions of the Chamber of Advocates Law 5721-1961,
an advocate must, if he is called upon to do so by an Assessing Officer,
deliver to him any document in his possession, enable him to examine and
seize any aforesaid document and allow him to perform any other act in
respect of a said document, all in accordance with the powers vested in him
under this Ordinance, but the advocate shall not have to do so if he claims
that the document is privileged.
Claim of privilege
235C. (a) If an advocate claims that a document demanded by an Assessing
Officer is privileged, then the Assessing Officer shall take the document 248
and – without inspecting it – place it immediately and in the advocate's
presence in a package, close it, write on it the name of the client to
whom the document relates, sign it and deliver it to the Court; if
privilege is claimed for several documents that relate to the same client,
then he shall place all in the same package; the advocate may also, if
he so desires, sign the package, and he may accompany the Assessing
Officer when he delivers the package to the Court; for the present
purpose: "package" – an envelope or any other container.
(b) If, for any reason, it is impossible to deliver the package to the Court,
then the Assessing Officer shall deliver it to a judge, and he shall
deliver it to the Court; for the present purpose: "judge" – including a
judge of a District Court and a magistrate.
(c) Not later than seven days after the date on which a document said in
subsection (a) was taken, the client or the advocate from whom the
document was taken may apply to the Court to decide and announce
whether the document is privileged.
The Court's decision
235D. (a) A judge, within whose jurisdiction an application said in section 235C(c)
was received, shall hear the application and examine the document not
later than seven days after the date on which the application was
received; the judge shall hear the advocate and he may also hear the
Assessing Officer, without showing the document or disclosing its
contents to him.
(b) If the judge decides that the document is privileged, he shall return it to
the advocate from whom it was taken; if he decides that it is not
privileged, he shall deliver it to the Assessing Officer.
(c) If the judge decides that the document is partly privileged, then he shall
direct that a copy of the non-privileged part, certified by him, be
delivered to the Assessing Officer; a said copy, delivered to the
Assessing Officer, shall be admitted in evidence in any legal
proceeding, as if it were the original.
(d) If the Court did not receive an application said in section 235C(c) about
any document in a package delivered to it, then it shall deem the
document for which no application was submitted to be non-privileged
and it shall be delivered to the Assessing Officer.
(e) An application said in this section shall be heard in camera and the
judge's decision shall be final.
Permission to represent assessees
236. The following may represent assessees, and for this purpose: "represent" –
also before a books acceptability committee:
(1) an auditor, within the meaning of the term in the Auditors Law 5715-
(2) a person qualified to audit the books of a cooperative society under
section 20 of the Cooperative Societies Ordinance;
(3) a representative tax consultant, as defined in the Regulation of
Representation by Tax Consultants Law 5765-2005;
this provision shall not infringe the rights of any advocate under the Chamber
of Advocates Law 5721-1961.
236A to 236I – Repealed
Signature on notifications
237. (a) Every notification, which an Assessing Officer must make or send
under this Ordinance, shall be signed by him or by a person appointed
by him for that purpose, and every notification on which a said signature
is printed or written, or on which the Assessing Officer's name is
written, is valid; however, every notification under this Ordinance, in
which it is demanded that a person or a witness appear before the
Assessing Officer, shall be signed in person by the Assessing Officer or
by a person duly authorized by him.
(b) A signature on any notification, that purports to be the signature of a
person appointed for that purpose, shall be deemed to be that person's
signature, as long as the opposite has not been proven.
Service of notifications
238. (a) A notification may be served on a person either in person or by
registered mail to his last known business address or private residence;
if sent by registered mail, it shall be deemed a notification served on the
sixth day after the day of its dispatch, if sent to a person in Israel, or – if
it was sent to persons outside Israel – on the day after the day on which
it would have arrived if sent by mail in the ordinary way, and in order to
prove service in this manner it shall suffice to prove that the letter that
contained the notification was properly sent and properly addressed.
(b) If a notification was sent as said in subsection (a) and the addressee
refused to accept it, then it shall be deemed to have been duly served.
240. In calculating an amount of chargeable income and every amount which a
person must pay under this Ordinance, that amount shall be increased or
decreased to the nearest whole new shekel.
Rules for the conversion of foreign income and losses
240A. The Director may prescribe conversion rules, according to which an
assessee's income, chargeable income, losses, expenses and tax payments
that stem from abroad shall be translated into new shekel amounts.
Forms, information and returns
240B. (a) Subject to the provisions under section 243(1), the Director may
prescribe the forms needed for implementation of this Ordinance; said
forms do not have to be published in Reshumot and they shall be
published in a manner prescribed by the Director; when the Director
has prescribed said forms, then no person shall use any others.
(b) If an assessee is required to deliver information or a return under this
Ordinance, he shall deliver the information or return by magnetic media,
if the Director so required, all as the Minister of Finance prescribed with
approval by the Knesset Finance Committee.
Designating the tax year
241. A special assessment period shall be designated by the number of the year in
which April 1 of that special assessment period falls.
Effect of Law concerning trade with the enemy or with absentees
242. If the Trading with the Enemy Ordinance 1939, the Absentees' Property Law
5710-1950 or any other statute that deals with trade with the enemy or with 250
absentees affects a person, an income or an asset, then the provisions in
Schedule Two shall apply.
Power to make regulations
243. The Minister of Finance may make regulations for the implementation of the
provisions of this Ordinance, especially including regulations on –
(1) forms for returns, claims, statements and notifications under this
(2) the deduction at the source and payment of tax in respect of benefits
and pensions paid out of the State Treasury, on work income or on
income under section 2(5);
(3) any matter on which the Ordinance authorizes him to prescribe.
Power to change deductions and credits
244. The Minister of Finance may – by an Order that requires the Knesset's
approval by a resolution – change the rates of the deductions and credits
specified in this Ordinance.
244A. The Minister of Finance may, with approval by the Knesset Finance
Committee, prescribe conditions and necessary adjustments for the purposes
of sections 5, 29, 64A1 to 64A10, 67B to 67K, 68A, 75C to 75Q, 85A, 91, 92,
100A, 102 and Chapter Three of Part Ten.
Prohibition of reductions and concessions
245. (a) Deductions or set offs shall not be allowed, and exemptions, tax
reductions or other concessions shall not be granted, unless they are
expressly prescribed in a Law or by virtue of a power defined in a Law.
(b) Notwithstanding the provisions of subsection (a), the Minister of
Finance may, with approval by the Knesset Finance Committee, make
regulations for the grant of aforesaid concessions, but their effect shall
expire three months after the date of their publication; however, the
Minister of Finance may, with aforesaid approval, extend their effect
until the end of the tax year in which they were published.
(c) (1) The Minister of Finance may, with approval by the Knesset
Finance Committee, prescribe for each tax year a ceiling for tax
benefits to be allowed in the tax year under sections 20 and 20A,
and he may prescribe separate ceilings for categories of benefits;
the ceiling for benefits in respect of oil prospecting shall be set
after consultation with the Minister of Energy and Infrastructure.
(2) No regulations shall be made and no certification issued under
sections 20 or 20A in a certain tax year, if that increases the total
of tax benefits allowed in that year by virtue of the said sections to
more than the ceiling amount set by the Minister of Finance for
that tax year.
Avivim, Abirim, Even Menahem, Idmit, Or Haganuz, Eilon, Alkosh, Bet Hillel, Baram,
Betzet, Bar Yochai, Goren, Gush Halav, Gaaton, Granot Hagalil, Gesher Haziev,
Dovev, Dishon, Dalton, Dan, Dafna, Hagoshrim, Hila, Ziev Hagalil, Zarit, Hossen,
Hanita, Hurfeish, Yaara, Yiftah, Yiron, Kabri, Kfar Blum, Kfar Giladi, Kfar Yuval, Kfar
Szold, Kerem Ben Zimra, Liman, Metulla, Miron, Malkieh, Manot, Manara, Meona,
Meilya, Mayan Baruch, Maalot Tarshiha, Matzuba, Margaliot, Misgav Am, Matat, 251
Neot Mordechai, Nahariya, Netuah, Sasa, Saar, Safsufa, Evron, Ein Yaacov, Alma,
Amir, Aramshe, Fassuta, Pekiin, New Pekiin, Tzivon, Tzuriel, Rag'er, Rosh Hanikra,
Reihaniya, Ramot Naftali, Shear Yishuv, Sdeh Eliezer, Sdeh Nehemya, Shomera,
Shlomi, Shamir, Snir, Shetula.
Avshalom, Or Haner, Ibim, Eilot Regional Council, Erez, Beeri, Bet Shean, Gibim,
Gvaram, Dekel, Zikim, Zimrat, Holit, Hatzor Glilit, Yevul, Yad Mordehai, Yachini,
Yesha, Yeted, Kissufim, Kfar Maimon, Kfar Aza, Carmiah, Kerem Shalom, Mivtahim,
Magen, Mefalsim, Nahal Oz, Nir Yitzhak, Nir Oz, Nir Am, Nirim, Netiv Ha'assara,
Suffa, Saad, Ein Habsor, Ein Hashlosha, Alumim, Amioz, Central Arava Regional
Council, Arad, Pri Gan, Re'im, Sdeh Avraham, Shuva, Shokda, Tushia, Talmei
SCHEDULE ONE "A"
(1) FOUNDATION – under the Laws of Holland, Liechtenstein, Panama, the
Bahamas or the Dutch Antilles
(2) ESTABLISHMENT – under the Laws of Liechtenstein
(3) REG. TRUST – under the Laws of Liechtenstein
SCHEDULE ONE AA1@
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
1. In this Schedule –
"the Custodian" – the Custodian of Enemy Property, appointed under section
2 of the Trading with the Enemy Ordinance 1939, or the Custodian of
Absentees' Property, within its meaning in the Absentees' Property Law 5710-
"Trading with the Enemy Laws" – the Trading with the Enemy Ordinance
1939, or the Absentees' Property Law 5710-1950, or any other statute that
relates to trade with the enemy or with absentees, and wherever this
Schedule refers to money or assets or income received or held by the person
in charge of it – including money or assets or income held to his order;
"asset" – within its meaning in section 9 of the Trading with the Enemy
Ordinance 1939, or absentees' property, within its meaning in the Absentees'
Property Law 5710-1950;
"blocked asset" – money or an asset held by the Custodian;
"blocked income" – income payable to the Custodian, which would have
been included in the chargeable income of a person for a certain tax year, if
not for the Trading with the Enemy Laws, and "owner of income" – an
aforesaid person. 252
Tax on blocked income
2. Blocked income shall be deemed the chargeable income of the owner of the
income, and the Custodian may be assessed in respect of that income, in the
manner in which the owner of the income would have been assessed, had it
been included in his income for that year.
Custodian's entitlement to tax benefits
3. When the Custodian is assessed in respect of blocked income under section
2 of this Schedule, or if he received blocked income paid after the deduction
of tax, and if it is proven to the Assessing Officer's satisfaction that the owner
of the blocked income would have been entitled – on his claim – to tax
benefits, if not for the Trading with the Enemy Laws, then that credit shall also
be allowed the Custodian, whether by way of refund or in another manner.
Assessment of individual owner of income
4. If the Assessing Officer concludes, on the basis of information in his
possession, that the chargeable income of a certain individual owner of
income should have included income that is not blocked, then the Assessing
Officer may assess that person in respect of that income which is not blocked
without a notification of assessment.
Custodian's obligation to pay tax on blocked income
5. If tax was assessed on the Custodian under section 2 of the Schedule in
respect of blocked income, then the Custodian shall pay it alone or through
another, out of money of the owner of the income which he holds.
Custodian's obligation to pay all the tax due from owner of blocked income
6. The Custodian shall pay, out of the money of an individual owner of income
held by the Custodian – if there is no different explicit provision in this
Schedule – all the tax due from that individual according to the Assessing
Officer's demand for each assessment year or tax year, and any amount paid
as aforesaid shall be treated as if it had been paid by that individual; in an
aforesaid demand the Assessing Officer may also include an amount, in
respect of which the assessment still is, or can be, the subject of objection or
Effect of release of income
7. If the Custodian released to a person, to his credit or to his legal
representative everything in his possession to which that person would have
been entitled, if not for the Trading with the Enemy Laws, then thereafter –
(1) all income released as aforesaid shall be deemed the income of the
person who would have received the income, if not for those statutes;
(2) any tax paid in respect of that income by the Custodian, whether by
deduction or otherwise, shall be treated as paid by the said person and
any benefit accorded the Custodian in respect of that income shall be
deemed to have been accorded to that person;
(3) the said person or his representative may submit objections and
appeals against an assessment of the Custodian in respect of that
income, as if he had been assessed.
Owner of released income liable for assessment before release
8. If the Custodian was assessed under the provisions of this Schedule, and if –
before or after the assessment – he paid or transferred or released all or part 253
of the income to another person or permitted that to be done, then that part of
the tax which must be paid under the assessment, which the Custodian
cannot pay under the provisions of this Schedule, shall constitute a debt
owed to the State by the person who is deemed the owner of that income
under section 7 of the Schedule, or by his legal representative, if it is a case
to which this section applies, or by the person to whom the income was paid,
transferred or released, and that part shall be paid accordingly and the
Custodian shall cease to be responsible for the tax.
Relaxation of time limitations
9. Notwithstanding the limitations in the Ordinance for the preparation of
assessments, for objections and for appeals, assessments may be made
under sections 2 and 4 of the Schedule at any time before a date set by the
Minister of Finance, and objections and appeals against an aforesaid
assessment and claims for tax benefits may be submitted at any time before
Persons deemed to be owners of income
10. For purposes of sections 2 to 4 of this Schedule it is assumed – unless the
opposite has been proven – that since September 3, 1939, nothing happened
to change the identity of a recipient of blocked income or of an owner of a
blocked asset, and every assessment under section 2 of the Schedule shall
specify the name of the owner of the income.
Tax on income generated, but still unpaid
11. If income from a certain source in a certain tax year should have been paid to
the Custodian, if not for the fact that – during that tax year – no income from
that source was available for payment, and if that income nevertheless would
have been liable to tax, if not for the Trading with the Enemy Laws, then the
provisions of this Schedule shall apply, as if income from that source had
been available in that year and had been paid to the Custodian.
12. The provisions of this Schedule shall be in effect for assessment years
beginning with April 1, 1947, and for all the assessment years and all the tax