Israel has met all aspects of the terms of reference (OECD, 2021[1]) (ToR) for the calendar year 2023 (year in review), and no recommendations are made.
Israel can legally issue five types of rulings within the scope of the transparency framework.
In practice, Israel issued rulings within the scope of the transparency framework as follows:
|
Type of ruling |
Number of rulings |
|---|---|
|
Past rulings |
79 |
|
Future rulings in the period 1 April 2016 – 31 December 2016 |
5 |
|
Future rulings in the calendar year 2017 |
3 |
|
Future rulings in the calendar year 2018 |
15 |
|
Future rulings in the calendar year 2019 |
30 |
|
Future rulings in the calendar year 2020 |
15 |
|
Future rulings in the calendar year 2021 |
47 |
|
Future rulings in the calendar year 2022 |
24 |
|
Future rulings in the year in review |
19 |
No peer input was received in respect of the exchanges of information on rulings received from Israel.
600. Israel can legally issue the following five types of rulings within the scope of the transparency framework: (i) preferential regimes;1 (ii) cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; (iii) rulings providing for unilateral downward adjustments; (iv) permanent establishment rulings; and (v) related party conduit rulings.
601. For Israel, past rulings are any tax rulings within scope that are issued either: (i) on or after 1 January 2014 but before 1 April 2016; or (ii) on or after 1 January 2010 but before 1 January 2014, provided they were still in effect as at 1 January 2014. Future rulings are any tax rulings within scope that are issued on or after 1 April 2016.
602. In the prior years’ peer review report, it was determined that Israel’s undertakings to identify past and future rulings and all potential exchange jurisdictions were sufficient to meet the minimum standard. In addition, it was determined that Israel’s review and supervision mechanism was sufficient to meet the minimum standard. Israel’s implementation remains unchanged, and therefore continues to meet the minimum standard.
603. Israel has met all of the ToR for the information gathering process and no recommendations are made.
604. Israel has the necessary domestic legal basis to exchange information spontaneously. Israel notes that there are no legal or practical impediments that prevent the spontaneous exchange of information on rulings as contemplated in the Action 5 minimum standard.
605. Israel has international agreements permitting spontaneous exchange of information, including: (i) the Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011[2]) (“the Convention”) and (ii) bilateral agreements in force with 55 jurisdictions.2
606. During the year in review, no exchanges were required to take place and no data on the timeliness of exchanges is reported. Israel notes that a delay occurred between the department issuing the rulings and the exchange of information (EOI) department. The reason for the delay was departure of staff members and a lack of new staff members. The EOI department only received the information on the rulings in March 2024 and made the relevant exchanges directly at the end of March 2024.3 As Israel has quickly taken steps to identify and remedy the issue and as this is therefore not expected to be a recurring issue, no recommendations are made.
607. Israel has the necessary legal basis for spontaneous exchange of information and a process for completing the templates in a timely way. Israel has met all of the ToR for the exchange of information process and no recommendations are made.
608. As there was no information on rulings exchanged by Israel for the year in review, no statistics can be reported.
609. In the prior years’ peer review reports, it was determined that Israel’s information gathering and exchange of information processes for matters related to intellectual property regimes4 were sufficient to meet the minimum standard. Israel’s implementation in this regard remains unchanged and therefore continues to meet the minimum standard.
|
Aspect of implementation of the transparency framework that should be improved |
Recommendation for improvement |
|
No recommendations are made. |
[1] OECD (2021), BEPS Action 5 on Harmful Tax Practices - Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD Publishing, Paris, http://www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparency-framework.pdf.
[3] OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264241190-en.
[2] OECD/Council of Europe (2011), The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, OECD Publishing, Paris, https://doi.org/10.1787/9789264115606-en.
← 1. With respect to the following preferential regimes: Preferred company regime and Preferred technological enterprise regime.
← 2. Participating jurisdictions to the Convention are available here: www.oecd.org/tax/exchange-of-tax-information/convention-on-mutual-administrative-assistance-in-tax-matters.htm. Israel also has bilateral agreements with Australia, Austria, Belarus, Belgium, Brazil, Bulgaria, Canada, China (People’s Republic of), Croatia, Czechia, Denmark, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Hungary, India, Ireland, Italy, Jamaica, Japan, Korea, Latvia, Lithuania, Luxembourg, Malta, Mexico, Moldova, Netherlands, Norway, Panama, Philippines, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, Chinese Taipei, Thailand, Türkiye, Ukraine, United Kingdom, United States, Uzbekistan and Viet Nam.
← 3. 50 exchanges were made at the end of March 2024 with: Argentina, Australia, Brazil, Canada, Chile, Cyprus, France, Germany, Gibraltar, Hong Kong (China), Hungary, India, Ireland, Isle of Man, Japan, Kenya, Latvia, Lithuania, Netherlands, Nigeria, Poland, Singapore, Spain, Sweden, Switzerland, Türkiye, Uganda, United Kingdom and United States. This will be reflected in next year’s report.
← 4. The Preferred company regime, which is the grandfathered regime, and the Preferred technological enterprise regime, which is the amended regime.