Everything you wanted to know about Form 1214
According to the Israeli Tax Ordinance, at the end of each year, every company is required to submit an annual report detailing its income for that year. The report must be submitted online through the website of the tax authority using Form 1214, when it is completed and signed by the company's manager and a certified accountant
What is Form 1214?
Form 1214 is a financial statement form for a company's annual tax year, submitted by business owners and companies for income tax reporting. The report details all the income received by the business/company during the past year, including a summary of taxes paid throughout the year, as well as any deductions and credits to which it is entitled.
In accordance with Section 131(b)(2) of the Income Tax Ordinance, the submission of the annual report on Form 1214 is done online through the website of the tax authority.
Who is required to submit Form 1214?
Every individual or company in Israel is obligated to submit an annual report detailing their income for that year, at the end of each year. This requirement applies to all except those exempted from the obligation of online reporting, according to the Income Tax Regulations (Exemption from Independent Online Reporting), 2010.
Individuals or companies engaged in business are required to do so through Form 1214. It's important to note that the report is filed under the household unit. Therefore, when the filer is a married individual, they must submit a report that also includes the income of their spouse, even if the spouse is a salaried employee.
What are the deadlines for submitting this form?
The company report must be submitted using Form 1214 by the end of each calendar year (which starts on January 1st and ends on December 31st) by May 31st of the following year. For example, for the year 2016, the report must be submitted by May 31, 2017.
If the documents for submitting the report were not received, or for any other reason, the submission of the annual report can be postponed by submitting a request to the tax authority for an extension.
Please note that representatives such as accountants and tax advisors have general extensions for their clients within the framework of their office, allowing them to submit the report after May 31st.
Warning: Submitting the report late without receiving approval from the tax authority for an extension will result in high penalties.
What are the implications of filling out this form on our taxation?
Filing an annual report allows the tax authority to calculate the final tax liability of the filer (business owner/company) for their income in that year. Sometimes, as a result of submitting the report, a tax refund may be issued, while at other times, additional payments may be required, in accordance with the law.
Therefore, Form 1214 that is submitted should be as detailed as possible and include accurate amounts and details. Often, additional attachments need to be included with Form 1214, which can affect the final tax liability. For example:
- Profit and loss statement
- Statement of changes in equity
- Form 1323 - Appendix D, company income and foreign tax credit
- Form 1214B - Dividend distribution
- Form 1342 - Form 11 - Form detailing all company investments in buildings and equipment
- Form 1343 - Additional deduction due to depreciation
And more...
Why should I submit this form with an accountant?
First of all, according to the law, an annual report must be signed by a certified public accountant. Secondly, a reputable accounting firm will prevent errors in completing the report and will be able to perform early tax calculations before submitting the report to the tax authority. A certified public accountant submits the report while considering all relevant factors, including advance payments and/or deductions made by the company during the year, so that by the time of submission, it is possible to determine whether the business is eligible for a tax refund. Correct submission of the report has the potential to generate a larger tax refund. A reputable accounting firm has the knowledge and ability to maximize the tax benefits available to business owners and companies.
Of course, both online and physical submission of the report is done through the certified public accountant, who also oversees its examination and can request corrections from the tax authority, for example, for mistakes made during data entry by tax office clerks. In the event of a tax refund, the accountant will act to receive it within 90 days from the date of report submission.
It's important to note that the payment for submitting an annual report is a recognized expense for tax purposes.
Shtainmetz Aminoach & Co. is an experienced and reputable accounting firm specializing in submitting annual reports for its clients. We are committed to maximizing the personal tax benefits for each of our clients and maximizing the tax benefits available to them
You are welcome to contact us by calling 077-7700000 or by sharing your details here for a callback.
We would be happy to assist you with any inquiries