Employees will not be allowed to file a tax refund class action without a formal request

The Supreme Court ruled today (Thursday) that salaried employees are not allowed to file a class action against the Tax Authority to recover taxes that they claim have been paid in excess – by way of withholding tax by their employers – without first submitting a formal request for a tax refund by them in accordance with the Income Tax Ordinance.

In 2018, a request was submitted to the Central Lod District Court (Honorable Judge Bornstein) to approve a class action that was presented as being filed on behalf of Thai workers in an Israeli settlement in the Jordan Valley. In the application, it is claimed that the workers’ funds came into the hands of the state following the deduction of income tax at source which was carried out by their employer unnecessarily and illegally. The district court rejected the request for approval of the action. In the appeal against the rejection of the request, it was unanimously determined by the Court of Appeal (Honorable Judge A. Stein with the concurrence of Honorable President A. Hayut and Honorable Judge Y. Wilner) that in view of the provisions of the Income Tax Ordinance, a person who claims that he deserves a tax refund and does not submit a request for a refund Tax in an abbreviated report (“Form 135”) – is not allowed to file a personal claim with the court in this matter, and in the absence of grounds for a personal claim, a class action cannot be filed. It was also determined by two of the panel judges that the appeal should also be rejected because a class action is not the efficient and fair way to decide the dispute.

The tax authority was represented by the fiscal department in the state attorney’s office.

Illustration. Photo: pixabay

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Enable Notifications OK No thanks