Client updates / Tax

After lengthy discussions, the Knesset approved a wartime compensation outline for businesses. The outline offers compensation of up to a maximum of ILS 1.2 million to businesses with annual turnovers ranging between ILS 12,000 and ILS 400 million.

Legitimate tax planning or an artificial transaction to reduce tax liability? Israeli court ruling on a dividend distribution prior to a sale of shares or holdings of a company.

The Israel Tax Authority is publishing a series of tax reliefs to help companies and individuals and the current defense and civilian efforts.

Israel’s new “Angels Law” grants tax benefits to investors in Israeli startups, and in the Israeli high-tech industry in general, with the goal of spurring the growth of high-tech companies based in Israel or whose intellectual property is registered in Israel.

For the first time, the Israel Tax Authority has announced its position regarding investments via SAFEs. It determined that, under particular circumstances, the investment is to be considered an advance on a share investment account.

A corporate inversion is a process of changing a company’s holding structure, largely with the intention of turning an existing company into a foreign company by positioning a foreign company as a parent company of the Israeli company and enabling the Israeli company to expand into new markets in the international arena.

Preparing reports on an accrual basis and adjusting them to a cash basis for tax purposes was an acceptable practice until the Israel Tax Authority (the “ITA”) determined otherwise. However, many companies still prepare two sets of reports, sometimes resulting in problems with the ITA.

The Israeli tax authorities are examining acquisition transactions, inter alia, to ensure they are not artificial transactions intended for offsetting losses. Transactions acquiring public shells are no exception in this regard.

A sale of intellectual property between related parties requires advance planning and preparation in order to avoid tax exposures in Israel.

The use of token-based compensation has grown in recent years. It is important to understand the tax aspects of such compensation, especially when a company is gearing up for a major deal.

The Israel Tax Authority and the Real Estate Tax Appeals Committee disagree on the entitlement to the maximum exemption from land appreciation tax.

The Israeli court’s ruling further details and explains the complicated tax issues that may arise from business restructuring and from transactions that create such restructuring.

On May 31, 2021, Israel and the United Arab Emirates signed a tax treaty. This is the first tax treaty between the states. It is expected to go into effect on January 1, 2022, after passing the necessary ratification processes in the Knesset and the government.

In order to promote the technology and biomedical industries and to restore the Israeli stock exchange to its position as an efficient and attractive arena for capital raising to companies, an ad hoc committee was formed to analyze feasible tax incentives.

Several days ago, the second phase of financial assistance grants for third-sector companies kicked off. Compared to the first phase, the size of a company’s revenue for grant eligibility was expanded, as were the period of harm and the maximum assistance threshold.

In a bold step, the Haifa District Court rejected the Israel Tax Authority’s position on a company’s repurchasing of shares, and in effect split with a ruling of the Tel Aviv District Court, who considered a similar issue several years ago.

Israeli Minister of Finance Israel Katz’s plan to reduce purchase tax for investors has gone into effect. Until now, under plans advanced by the previous Minister of Finance, Moshe Kahlon, for lowering housing prices and pushing investors out of the real estate market, the purchase tax for investors went up from 5% to 8% for an apartment that was not the purchaser’s sole apartment.

A hedge fund is an entity comprised of several investors seeking to invest in financial assets to achieve a common profit, where the execution of the investment may change from one fund to another, in accordance with the investment strategies put in place by the fund manager.

Due to the coronavirus pandemic, the Israel Innovation Authority (IIA) has issued a major easement for the companies it supports, in the manner in which payroll expenses for companies in the midst of carrying out approved plans will be recognized.

In light of the coronavirus pandemic affecting the economic market, the Israel Tax Authority has published several reliefs for taxpayers.