Israel’s Tax Authority said on Tuesday that the CEO of Deutsche Bank’s local subsidiary has been arrested and released on bail over allegations that it had misreported transactions worth more than 550 million shekels ($147 million) since 2011. Deutsche Bank’s local offices were raided and equipment seized, the authority said. Judge Keren Miller of Jerusalem Magistrates Court freed CEO Boaz Schwartz after he agreed to post a 450,000-shekel bail and another 1 million shekels bond and to avoid contact with others involved in the case. Tax investigators allege that Deutsche Bank Israel failed to pay value-added tax by reporting transactions as if they were being performed for non-Israelis, who pay a zero tax rate, even as it was providing services for Israelis, which is subject to tax. “Deutsche Bank in Israel and abroad acts in accordance with the law and strict legal advice,” the bank said in a statement. “We are cooperating with the tax authorities on this inquiry and will continue to do so.” An attorney close to the case said the services were provided by Deutsche Bank Israel to its German parent company, including consulting and referring clients, that should not have been liable for VAT. Officials at the bank said they were surprised that a two-year-old probe into the matter had suddenly turned into a criminal complaint from a civil one, without any obvious reason.
Boaz Schwartz , CEO of The Israeli Tax Authority Israel , has been arrested over allegations of falsely reporting deals worth over Boaz Schwartz ( $147 million ) since 2011 . The Israeli Tax Authority claims that the CEO reported that the deals were on behalf of non-Israelis only, therefore being tax-free but actually included Israeli residents who are required to pay taxes. The offices of Deutsche Bank were searched and evidence collected. The Israeli Tax Authority has been granted bail under certain restrictions.