The French Tax Administration has set up a “secret” department in Paris devoted solely to investigating tax evasion by French Jews with property in Israel, Israel’s Globes Daily reported on Thursday. The French government denied the report a day later.
The Globes report claimed that the department was founded over the last year, has 20 Hebrew-speaking employees, and is in the process of hiring five more. Many are experts in the field of taxes and Israeli law, it said. They pore over Israeli Land Registry contracts in an effort to find French Jews who purchased property in Israel without declaring these assets in France, according to the report.
In a December 29 press release, the French government denied the story.
“The General Directorate of Public Finances denies in the most categorical way the unfounded affirmations published today in the Globes newspaper on the ‘creation within the French tax administration of a department specializing in French Jews.’ There is no such structure in the French tax administration. French tax legislation prohibits any distinction made between people on the basis of their origins, place of residence or membership of a particular nation or religion.”
The article quoted several experts saying they viewed the establishment of such a department devoted exclusively to French Jews as having anti-Semitic overtones.
“It is very, very irregular to hire 20 Hebrew-speaking employees, or any other language, in a foreign tax authority,” an international lawyer told Globes. “Most tax authorities have one or two Hebrew-speakers, and there are English or French-speaking employees in Israel for the purpose of signing conventions and conducting relations with the tax authorities of other countries.”
In recent years, thousands of Jews have immigrated to Israel from France, many of them fleeing anti-Semitism. However, there is evidence to suggest that some of these immigrants may have also been motivated by tax benefits.
Andrew Amolis, a South African economist who studies the migration patterns of the very wealthy for New World Wealth, a global market research group, told the Times of Israel that Israel has consistently been one of the world’s top destinations for millionaires for the past several years. Many of the millionaires who move to Israel hail from France, he said.
“Israel is a very safe country and offers strong business opportunities for high net worth individuals,” he told The Times of Israel. “Taxation there is also more reasonable than in Europe where over-taxation has become the new norm.”
“A handful of countries,” Amolis further elucidated in the 2017 Knight-Frank Wealth Report, “including Canada, Malta, the United Arab Emirates, Qatar, Monaco, and Israel, as well as Australia and New Zealand – enjoyed significant growth in their ultra-wealthy populations during 2016. What these countries share is the ability to attract migrating high-net-worth individuals and to offer a fiscal and political ‘safe haven’ as well as excellent quality of life.”
In the case of Israel, Amolis is referring to a 2008 law that offers new immigrants and returning immigrants to Israel a ten-year exemption from taxes and any reporting requirement on their income abroad. Ostensibly a law to encourage aliyah, or immigration to Israel, critics claim it signaled to would-be tax evaders and criminals that Israel is a good place to launder their money.
“The idea was to encourage aliyah to Israel of wealthy people by turning Israel into a tax haven,” Bar-Ilan University economist Avichai Snir told The Times of Israel in February. “The new law definitely gave a nudge and a wink to people who had dirty money and wanted to launder it.”
According to the Globes article, the new department in the French Tax Administration has begun looking at Land Registry documents from Israeli cities like Tel Aviv, Herzliya, Ra’anana, Netanya, and Jerusalem where French people tend to purchase property. Investigators then look for foreign passport details on a property deal.
According to the Globes article, the French tax authority frequently contacts its Israeli counterpart for information about French citizens living in Israel but the Israeli Tax Authority frequently rejects these requests. The French embassy in Israel, contacted by Globes, denied the existence of a special department devoted exclusively to French Jews.
Some readers of the Hebrew article expressed outrage at the perceived anti-Semitism of the French government. However, the majority of commenters thanked the French government for reportedly enforcing the law against alleged money launderers.
“Many of these French immigrants bring dirty money with them,” read one such comment. “They bought up real-estate and massively inflated the prices. Only in Israel would they let the dirty money of opportunistic tax evaders screw over the younger generation that can’t afford to buy decent apartments.”
“I hope the French government looks after of the young generation in Israel,” another commenter replied. “There is no chance that the Israeli government will do so.”
In the course of its reporting on binary options fraud, The Times of Israel learned that a group of several hundred serial fraudsters from France have made Israel their home and use Israel as a base to carry out Internet fraud, from carbon-VAT fraud, to CEO fraud, to forex and binary options, diamond investment fraud, and more recently, cryptocurrency fraud.
These professional con artists advertise intensively to young French-speaking immigrants who work for them as a job of last resort or a way to earn more than they could doing legitimate work. Israel has been lax in cracking down on these call centers, despite the fact the Paris prosecutor said last year that French citizens had lost 4.5 billion euros to such fraudsters, many operating from Israel, since 2010.
The Times of Israel recently asked the Israeli police what they are doing to combat the phenomenon of fraudulent French-speaking call centers based in Israel, but a police spokesperson professed no knowledge of the phenomenon.