Who will foot the bill for coronavirus quarantines?
Any employer who paid sick pay to an employee for days in quarantine in the six-month period from October 1, 2020, to March 31, 2021, may claim reimbursement from the government.
By LEON HARRISA MAN pets his cat as he sits by the window of his Jerusalem apartment during a nationwide quarantine in March. (photo credit: HADAS PARUSH/FLASH90)
Who foots the bill when employees are required to go into quarantine due to coronavirus concerns? The National Insurance Institute has offered to do so in a circular published December 6.Who can claim?Any employer who paid sick pay to an employee for days in quarantine in the six-month period from October 1, 2020, to March 31, 2021, may claim reimbursement from the government (see below). This applies to quarantine of the employee or their child aged up to 16, but NOT if the employee worked in that period.How much?The reimbursement depends on the employee head count as of August 1, 2020, and the amount paid to the employee.An employer with up to 20 employees may receive up to 75% reimbursement. An employer with more than 20 employees may receive up to 50% reimbursement. But payment for statutory rest days will be deducted from the reimbursement.Main conditionsThe start date for filing reimbursement claims will be in February 2021. The quarantine days must be notified to the Health Ministry by the employees here: gov.il/he/service/quarantine-self-report, or by phone at *5400. Employers must check this was done. And if the employee is late notifying the Health Ministry, the reimbursement will not cover more than four days before notification is actually made.For example, if an employee is confined to quarantine on December 1, 2020, and only gets around to notifying the Health Ministry on December 6, reimbursement may be claimed for the period starting December 3.The employer can let their accountant or other representative file the claim on the National Insurance Institute’s online system or using a special form at: btl.gov.il/Corona/Pages/BidudMasikim.aspx.
Bank transfer roadblockOn a separate note, the Israeli CPA Institute took aim at Bank Mizrahi Tefahot on December 21 and instructed accountants not to fill in a form confirming overseas matters that Israeli accountants are not in a position to confirm.As many Israeli businesses and individuals and others know, it isn’t easy remitting money to and from Israel.The Israeli banks are required by Bank of Israel directives to apply anti-money laundering procedures to reduce the risk of crime money, including tax crime money.But banks are ill-equipped to assess tax crimes so they typically ask the client’s accountant to confirm that all relevant taxes have been paid on that money (not only Israeli tax).Until then, the bank typically freezes the money and it does not usually appear on the client’s bank statement. And after a period which varies from bank to bank, the money might be returned abroad, with or without warning.On April 6, 2020, the Auditors Council at the Justice Ministry, which licenses Israeli accountants, reminded accountants that it is a disciplinary offense to sign a special confirmation that cannot be verified, even if it is demanded by a bank.And on April 12, 2020, the CPA Institute published a revised Audit Standard 3000 spelling out what accountants can and cannot sign in principle. One possibility is to do an audit on a sample basis on data presented, and report accordingly.Another more helpful possibility is for the accountant to receive a signed statement about something from his client. The accountant, at his client’s request, may then check that the statement “matches” supporting documentation and report on the match.For example, an accountant might check that income on a bank statement matches income reported on a tax return.What is the problem now?The latest form from Bank Mizrahi Tefahot that triggered the ire of the CPA Institute doesn’t have a name. It asks where a foreign company is and who owns it.If a foreign company is in the United Arab Emirates, was it and all companies it controls incorporated on the mainland or in a free zone?More generally, was the company held via a Trust Company Service Provider? Are all the ultimate major shareholders (not defined) local citizens or residents?CommentsClearly, the form may trigger a diplomatic storm between Israel and the UAE. And the CPA Institute rightly points out that accountants will generally have little chance of confirming such matters under Audit Standard 3000. The Bank of Israel instructed the banks (on January 4, 2018) to only ask accountants to confirm things which they can pursuant to the audit standards of the CPA Institute.This form is regrettable, so are many other instances of excessive zeal and time-wasting demonstrated by many Israeli banks when it comes to international money remittances. Clearly legitimate transactions are routinely affected.As always, consult experienced professional advisers in each country at an early stage in specific cases. The writer is a certified public accountant and tax specialist at Harris Horowiz Consulting & Tax Ltd. leon@h2cat.com
