Turkish Airlines' Israeli office is currently being investigated for alleged tax evasion amounting to over 1.5 million shekels ($418,000), a statement by the Justice Ministry said Monday.
According to the statement, the Tel Aviv District Prosecution's Taxes and Economics Department is considering pressing criminal charges against the company as well as the head of its local office, Fatih Dogan, for failing to meet Israel's Tax Authority guidelines for foreign companies operating in Israel. The decision is pending a hearing before the head of the Taxes and Economics Department, attorney Mina Zamir.
Turkish Airlines in considered one of the world's leading international carriers, and was ranked the seventh-best airline in the world in 2012 and the fastest-growing airline worldwide in 2011. The company's Israeli office numbers dozens of Turkish employees, whose wages are subjected to both Turkish and Israeli tax laws.
The Tel Aviv District Prosecution believes that between 2006 and 2010 the airline filed false tax reports in Israel, and that the wages paid to the company's Turkish employees, which were deposited in their bank accounts in Istanbul, were higher than the wages declared in Israel for taxation purposes.
This method allegedly allowed Turkish Airlines' Israeli office to pay its employees "under the table" and avoid deducting taxes that should have been paid to the Israeli authorities.
The investigation into the matter was made public in December 2012, following several months of undercover work by the Tax Authority. Turkish Airlines' office in Tel Aviv was raided by Tax Authority agents, who seized company records and well as several computers.
Should the hearing conclude that Dogan and Turkish Airlines deliberately perpetrated fraud, they -- alongside the accountants who filed the reports on their behalf -- could be charged with tax evasion, tax fraud, filing false tax reports and falsifying corporate tax records.
A statement by Turkish Airlines, carried by the financial daily Globes, said that the airline "is in compliance with the tax laws and regulation of every country it operates in, including Israel. The company employs the services of Israeli tax advisers and it relied on their advice, which proved wrong. Once we were alerted to the situation, the company made sure to pay the missing taxes. Turkish Airlines will present its case before the [Tel Aviv District] Prosecution and we are sure that our explanation will fall on sympathetic ears."
Israel and Turkey have only recently resumed their diplomatic relations following a period of nearly three years during which Jerusalem and Ankara's once warm ties could be described as hostile, at best.
The two nations were locked in a diplomatic battle since May 2010, when Israeli commandos raided a Turkish vessel trying to breach the maritime blockade imposed on Gaza Strip. In March 2013, U.S. President Barack Obama brokered a reconciliation between Jerusalem and Ankara, but diplomatic relations between the two have yet to be fully restored.
התגובה הצינית של חמאס: "נבדוק את הטענות בנוגע לגופה שהושבה, מחויבים לעסקה"
מי שירת ומי השתמט: הקרב המשפטי בין בן כספית לבין השר אמסלם נגמר בפשרה
פרסומת | שומעים את העתיד
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שר הביטחון כ"ץ בטולכרם: "ניסיונות הפיגוע אתמול לא ירתיעו אותנו"