A local branch of the U.S. Republican Party had filed a petition on January 11, 2016 with the High Court of Justice in Israel, Israel’s highest court, opposing FATCA laws. The FATCA agreement between the United States and Israel was signed in 2014 and was ratified by legislation in Israel early in September 2016. In court, lawyers for the group argued that Israel’s 2014 agreement with U.S. tax authorities to implement laws that allow for “comprehensive and automatic transfer of personal data to the United States” is a violation of one of the Basic Laws that are regarded as Israel’s foundation charter, believing the laws to be a gross violation of privacy.
The Court ultimately dismissed the petition against the FATCA agreement and the transfer of data to the United States. Israeli Supreme Court Justice Menachem Mazuz was quoted as saying “[t]he alternative to privacy is criminal acts of every kind. This is nothing new, except for the fact that it is regulated now under law and other mechanisms. It’s like the infringement on the right to freedom of occupation. There is always a need for licensing, regulation and supervision. There are many infringements on freedom of occupation, right to property and privacy, because without it modern society cannot function.”
Pursuant to this decision, financial institutions have been given an extension until September 30th to comply with the FATCA laws. They must deliver information related to Israelis with a green card or a financial association with the United States and U.S. citizens with bank accounts in Israel to the Israel Tax Authority. The threshold amount required to have your financial information reported is $50,000 USD.
