WWTS Operations Director, PwC US
Please contact for general WWTS inquiries.
By submitting your email address, you acknowledge that you have read thePrivacy Statementand that you consent to our processing data in accordance with the Privacy Statement.
TerritoryAlbaniaAlgeriaAngolaArgentinaArmeniaAustraliaAustriaAzerbaijanBahamas, TheBahrainBangladeshBarbadosBelgiumBermudaBoliviaBosnia and HerzegovinaBotswanaBrazilBrunei DarussalamBulgariaCabo VerdeCambodiaCameroon, Republic ofCanadaCayman IslandsChadChileChina, People's Republic ofColombiaCongo, Democratic Republic of theCongo, Republic ofCosta RicaCroatiaCyprusCzech RepublicDenmarkDominican RepublicEcuadorEgyptEl SalvadorEquatorial GuineaEstoniaEswatiniEthiopiaFinlandFranceGabonGeorgiaGermanyGhanaGibraltarGreeceGreenlandGuatemalaGuernsey, Channel IslandsGuyanaHondurasHong Kong SARHungaryIcelandIndiaIndonesiaIraqIrelandIsle of ManIsraelItalyIvory Coast (Côte d'Ivoire)JamaicaJapanJersey, Channel IslandsJordanKazakhstanKenyaKorea, Republic ofKosovoKuwaitLao PDRLatviaLebanonLiberia, Republic ofLibyaLiechtensteinLithuaniaLuxembourgMacau SARMadagascarMalaysiaMaltaMauritaniaMauritiusMexicoMoldovaMongoliaMontenegroMoroccoMozambiqueMyanmarNamibia, Republic ofNetherlandsNew CaledoniaNew ZealandNicaraguaNigeriaNorth MacedoniaNorwayOmanPakistanPalestinian territoriesPanamaPapua New GuineaParaguayPeruPhilippinesPolandPortugalPuerto RicoQatarRomaniaRwandaSaint LuciaSaudi ArabiaSenegalSerbiaSingaporeSlovak RepublicSloveniaSouth AfricaSpainSwedenSwitzerlandTaiwanTanzaniaThailandTimor-LesteTrinidad and TobagoTunisiaTurkeyUgandaUkraineUnited Arab EmiratesUnited KingdomUnited StatesUruguayUzbekistan, Republic ofVenezuelaVietnamZambiaOverviewCorporateSignificant developmentsTaxes on corporate incomeCorporate residenceOther taxesBranch incomeIncome determinationDeductionsGroup taxationTax credits and incentivesWithholding taxesTax administrationOther issuesIndividualSignificant developmentsTaxes on personal incomeResidenceOther taxesIncome determinationDeductionsForeign tax relief and tax treatiesOther tax credits and incentivesTax administration
Significant developmentsTaxes on corporate incomeCorporate residenceOther taxesBranch incomeIncome determinationDeductionsGroup taxationTax credits and incentivesWithholding taxesTax administrationOther issues
Significant developmentsTaxes on personal incomeResidenceOther taxesIncome determinationDeductionsForeign tax relief and tax treatiesOther tax credits and incentivesTax administration
Corporate - Group taxation
As a general rule, a parent company and its subsidiaries may not submit consolidated tax returns. Only groups of industrial companies in the same line of business, as well as parent companies that control industrial companies in the same line of business and have at least 80% of their assets invested in industrial companies, are eligible to file consolidated tax returns.
Transfer pricing
The ITO and its accompanying regulations contain elaborate transfer pricing provisions, including the arm’s-length principle, that apply to any international transaction in which there is a special relationship between the parties to the transaction and for which a price was settled on for property, a right, a service, or credit. In general, the regulations are based upon internationally recognised transfer pricing principles (i.e. US tax regulations or OECD rules). These regulations generally require the taxpayer to support the pricing of international transactions with a transfer pricing study, inter-company agreements, and other documentation. In accordance to Israeli High Court Rulings, the terms of transaction conducted between related parties should be set in written contracts.
A taxpayer is required to include in its annual corporate tax return a special form entitled ‘Declaration of International Transactions’ providing details for every cross-border transaction conducted with related parties. In December 2022, the ITA updated the transfer pricing form that is submitted annually within the tax return of an Israeli taxpayer reporting each inter-company transaction. This form includes requirements to disclose whether or not the company is following local safeharbourrules relevant to certain activities, and a new disclosure as to whether the company has local compliant transfer pricing documentation for the reported related-party transaction. As each form needs to be signed by the taxpayer, companies will need to carefully consider their local Israeli documentation compliance in respect to this increased disclosure within the corporate tax return.
In 2022, Israeli transfer pricing legislation has been amended to include two new sections adding the requirement for a Country-by-Country (CBC) Report and setting the legal foundation for a Master File requirement. With both of these amendments, Israel has now joined the many countries that have formally adopted requirements aligned with Action 13 of the OECD Base Erosion and Profit Shifting (BEPS) initiative and as detailed within Chapter V of the OECD Guidelines.
Since transfer pricing is a subject that receives considerable attention from the ITA in its examination of related inter-company transactions, transfer pricing principles and documentation requirements should be carefully adhered to.
Thin capitalisation
Israel has no statutory or regulatory provisions or other rules concerning thin capitalisation for tax purposes as exist in certain other jurisdictions. Since there are no thin capitalisation rules and Israel has no specific debt-to-equity ratio requirements, a company may be financed with minimum capital, and there is no limit to the amount of debt that may be used. Transfer pricing principles shall generally apply with regards to interest charges.
Controlled foreign companies (CFCs)
Under the CFC regime in Israeli tax law, an Israeli company or individual may be taxed on a proportion of certain undistributed profits of certain Israeli-controlled, non-resident companies in which the Israeli shareholder has a controlling interest (10% or more of any of the CFC’s ‘means of control’). A CFC is a company to which a number of cumulative conditions apply, including that most of its income or profits in the tax year were derived from passive sources (e.g. capital gains, interest, rental, dividend, royalties) and such passive income has been subject to an effective tax rate that does not exceed 15%.
Corporate - DeductionsCorporate - Tax credits and incentives
Print Current PagePrint Corporate Tax SummaryPrint Individual Tax SummaryAdvanced Print
Israel contacts
Tax Partner, PwC Israel
+972 3 795 48 49
Senior Tax Manager, PwC Israel
+972 3 795 48 04
PwC Israel
Tax services and publications
PwC's Pillar Two Country Tracker
See Pillar Two developments by country or region
Global Tax Talk
On-demand video series providing global tax policy news quickly and concisely