Client updates

Recently, the Finance Committee concluded its deliberations regarding the imposition of tax legislation pertaining to “wallet companies” within the scope of the Arrangements Law for 2017 – 2018.

Three updates to employee rights (Minimum Wage – Annual Paid Leave – Pension) came into effect on July 2016. The following is important news about the next update to employee rights, which is expected to come into effect on 1.1.2017.

November 2016 marked the first time that the Ministry of Infrastructures and Energy invited an open international call for bids for 24 licenses to 24 blocks (each not exceeding 400 km²) in Israel’s economic waters at a distance of at least 7 kilometers from the shore.

In October 2016, the Electricity Authority published a draft resolution to hold a hearing regarding the arrangement of a competitive proceeding to set the tariff payable for electricity generation using photovoltaic technology.

A customary practice in the credit market makes the provision of financing for a corporation contingent upon the creation of a floating charge on all of its assets in favor of the financier. In most instances, the bond terms relating to the lien also include a ”negative pledge” – a restrictive stipulation that prohibits a corporation from creating additional liens without receiving the financier’s prior written approval.

A few days ago the Knesset Labor, Welfare and Health Committee enacted an amendment to Section 35 of the website accessibility regulations, called “the Equal Rights for People with Disabilities (Service Accessibility Adjustments) Regulations 5773-2013” (the “Regulations”).

In an unprecedented action, the Knesset Finance Committee has recently recognized an Israeli organization operating abroad as a ‘public institution’ pursuant to section 46 of the Israeli Income Tax Ordinance. Such recognition affords the non-profit organization, a tax benefit, by way of a tax credit to donors for their donations granted to that organization.

The Knesset’s new anti-spam legislation includes any advertisement disseminated to the public at large that asks for a contribution or that constitutes non-commercial propaganda.

After years of district courts issuing contradictory rulings, the Supreme Court recently resolved the ambiguity surrounding the classification of compensation in respect of non-competition covenants when employees leave employers.

After about a year of uncertainty about the pension insurance allocation ratios according to Amendment number 12 to the Control of Financial Services (Provident Funds) Law of August 2015, the matter has recently been resolved.

An amendment to the Income Tax Ordinance that was recently enacted obligates financial institutions to identify the residency and citizenship of their foreign account holders. The financial institutions are required to report the information to the Israel Tax Authority, so that the ITA can then relay that information to the relevant foreign tax authority. 

During July, the Knesset passed the Control of Financial Services (Regulated Financial Services) Law. The Law is a harbinger of efforts to regulate the provision of financial services that had not been supervised up until now, apart from certain aspects pertaining to money laundering and the Regulation of Nonbank Loans Law. The Law also unifies the handling of all matters relating to the regulation of these services under one roof.

On July the Israel Tax Authority presented its position that the sale of equity by a founder should be treated as a capital gain and not income, irrespective of whether such shares had been subject to a Reverse Vesting mechanism and/or Holdback. A double edged sword for entrepreneurs.

In March 2016 the government adopted the housing cabinet’s recommendations regarding criteria for allowing foreign construction companies to begin operating in Israel. This move is one of the government’s strategies for increasing the volume of residential construction in Israel.

The Israeli Tax Authority (ITA) has announced this morning that the temporary Provision regarding the voluntary disclosure procedure which was supposed to expire today, has been extended until December 31^st, 2016.

A number of legislative amendments relating to the capital market have been promulgated recently, including

The Antitrust Commissioner intends to renew the validity and to amend nine block exemptions.

The Israel Tax Authority published a tax ruling given by it recently that sheds light on the existing ambiguity when classifying proceeds from a sale of shares of a company

In the last year, the Israeli Securities Authority (ISA) has been reviewing license applications submitted for obtaining an online own-account financial trading license. As part of this licensing process, the ISA is intermittently issuing press releases clarifying various issues relating to the scope of the licensing legislation.

On 21 August 2014 a new tax treaty between Israel and Germany was signed. The new treaty, which is based mainly on the model tax treaty of the OECD, introduces a number of favorable amendments (for the taxpayer) and improvements.