Israeli Tax Alerts | Practical Interpretations | 2008-2020

2 Dear clients, colleagues and friends We are happy to launch our first edition of the "Israeli Tax Alerts - Practical Interpretations". As one of the biggest and leading tax firms in Israel, we are aware of the global fluctuations when it comes to taxation, and foreign investors' requirements to receive practical and actual updates regarding Israeli tax amendments, in order to enjoy the best tax advice. The Israeli Tax Ordinance (hereinafter: " ITO ") provides benefits to foreign investors. Among these benefits we would like to note, that the ITO encourages foreign investors to invest in Israel through the Participation Exemption Regime . Our firm has received the first pre-ruling with respect to this regime, and will be happy to elaborate our experience with you. In addition, the ITO provides tax exemption from capital gain tax to foreign residents (regardless if they reside in a tax treaty jurisdiction) upon selling listed and unlisted Israeli companies, subject to conditions to be met. Furthermore, the Israeli Encouragement of Capital Investments Law provides reduced corporate income tax rates (hereinafter: " CIT ") ranging between 7.5% till 16% subject to conditions to be met, which technology companies can benefit from. Dividends distributions which were subject to reduced CIT are also entitled to a reduced withholding tax rate of 20% (tax treaties may further reduce the tax rate applied to such dividends distributions). Finally, the Covid-19 epidemic has caused many economic changes, during which different grants and tax benefits were constituted. The first edition of the "Israeli Tax Alerts - Practical Interpretations" summarizes our tax alerts until December 31, 2020, and includes, inter alia, amendments in the ITO, important court decisions, the Israeli Tax Authority's publications and other major tax topics. We will be happy to assist you in any subject that will be raised by you. We would like to wish all of you, a Happy Successful and most important - a Healthy New Year. With great friendship. Artzi, Hiba, Elmekiesse, Cohen - Tax Solutions Ltd