Weekly Newsletters
In our newsletter from December 16, 2013 (No. 17), we elaborated on the expected legislative changes from January 1, 2014 on the subject of a CFC a FVC. The main changes are as follows: - The corporate tax rate in the foreign country that constitutes a criterion for the determination of a CFC has been reduced from 20% to 15%;
1. Transitional arrangements for trusts that have been established by foreign residents: Recently, the Tax Authority has published transitional arrangements that establish different tax tracks for trusts that have been created by foreign residents, in which there is an Israeli beneficiary, in certain cases. These arrangements are intended to cover trusts in the Israeli tax net that through to December 31, 2013 were not liable to tax or were claimed to be as such, and that from January 1, 2014, in view of the new legislation, are liable to tax in Israel.
A few weeks ago, a verdict was handed down in the District Court in the matter of Yanco-Weiss Holdings (Tax Petition 1090-06) on the subject of the "Management & Control" criterion as a parameter for determination of the residency of a company. A similar verdict (the "Niago" case) was handed down about two years ago.
The Income and Capital Tax Treaty between Israel and Malta (“the Treaty”) has been ratified in Israel (after its ratification in Malta) and took effect on January 1, 2014. The Treaty sets the withholding tax rates according to the passive type of income below, subject to the fulfillment of conditions and exclusions that have been prescribed in the relevant sections in the Treaty:
The State of Israel has signed more than 50 tax treaties with other countries, within which there is usually a clause dealing with exchanges of information, to the extent that the information is required for executing the provisions of the treaty or application of internal law dealing with taxes that are covered by the treaty.
In our newsletter from December 16, 2013 (No. 17), we elaborated on the expected legislative changes from January 1, 2014 on the subject of a CFC a FVC. The main changes are as follows: - The corporate tax rate in the foreign country that constitutes a criterion for the determination of a CFC has been reduced from 20% to 15%;
A few weeks ago, a verdict was handed down in the District Court in the matter of Yanco-Weiss Holdings (Tax Petition 1090-06) on the subject of the "Management & Control" criterion as a parameter for determination of the residency of a company. A similar verdict (the "Niago" case) was handed down about two years ago.
The State of Israel has signed more than 50 tax treaties with other countries, within which there is usually a clause dealing with exchanges of information, to the extent that the information is required for executing the provisions of the treaty or application of internal law dealing with taxes that are covered by the treaty.
The Israel Tax Authority published on March 9, 2014 Transitional Arrangements (“the Arrangements”) regarding the taxation of Israeli Resident Beneficiary Trusts (“IRBT”). The Arrangements were published pursuant to the recent Amendment (Amendment 197) of the Income Tax Ordinance (“the Ordinance”) which, in substance, imposes taxes on the income of trusts where the settlor is a non-resident, or was non-resident upon his decease, and at least one of the beneficiaries is, or was in the past, an Israeli resident, i.e. an IRBT.