Owners of a hotel chain in the north and their accountant are suspected of tax offenses amounting to approximately NIS 20 million.

(haipo) The Haifa and Northern Investigations Tax Assessor is conducting an investigation against two brothers from Kfar Tavor and their accountant, on suspicion of false reports to the Income Tax Department, understating taxable income and failing to pay corporate tax on dividends, all totaling approximately 20 million shekels. The suspects were released on restrictive conditions at the Haifa Magistrate's Court.

Suspicion of false expense allocation between two hotels

According to spokespeople for the Tax Authority, the suspects Yaakov and Avihu Tal reported false reports to the Income Tax through the company they own, "Mountain and Sea Hotels Company Ltd." The company owned the Recital Hotel and the Sea of ​​Galilee Hotel, which was sold in 2021. In the relevant years, the Sea of ​​Galilee Hotel's income was exempt from tax under the Capital Investment Encouragement Law, while the Recital Hotel was liable for a full corporate tax rate of 23%. The arrest request indicates that in the company's reports for the years 2020-2021, the suspects reported, through accountant Yaakov Russo, expenses originating from the exempt activities of the Sea of ​​Galilee Hotel and attributed them to the activities of the Recital Hotel, which are subject to tax. In doing so, they allegedly reduced the company's taxable income by 5.3 million shekels.

A dividend of 10 million NIS and a false document about a capital loss

In addition, the company distributed a dividend of 10 million shekels to the two suspect brothers from income exempt from the Capital Investment Encouragement Law. A 20% preferential tax was deducted from this income, but the company had to report and pay full corporate tax on the amount of the dividend distributed. Also, during tax hearings, the suspects presented the Tiberias tax officer with a false document indicating a capital loss abroad in the amount of approximately 4.5 million shekels. This document was used, according to suspicion, to reduce the capital gain from the sale of the company's operations in 2021. The suspects were brought before the Haifa Magistrate's Court, which decided to release them under restrictive conditions. The investigation is ongoing.