The Israel Tax Authority (ITA) recently published a tax circular to clarify cases in which a transfer pricing study filed by a taxpayer will be considered to fulfil legal requirements and thus shift the burden of proof in the assessment process framework to an ITA inspector, in contrast to the general rule that the burden of proof rests with the taxpayer.
The taxation of real estate investments is complex and depends on various factors, including the property owner's status (ie, individual or corporation), the nature of the asset (eg, residential property, commercial property or land) and the purpose of the investment (eg, producing rental income or entrepreneurial profit). This article summarises the main factors to be considered when contemplating real estate-related investments in Israel.
The Value Added Tax (VAT) Law sets out that zero-rate VAT applies to the export of services to a foreign resident. However, recent judgments have interpreted such relief in a narrow manner and have significantly reduced the ability to charge zero-rate VAT on services rendered to foreign residents.
In light of the COVID-19 outbreak in Israel, and the significant restrictions imposed on foreign nationals entering Israel, the Population and Immigration Authority has issued a series of guidelines regarding visas for foreigners and foreign workers in Israel. This article summarises the relevant instructions.
The ongoing global outbreak and spread of novel coronavirus 2019 is a dramatic event of global proportions, with far-reaching implications for a wide range of areas, including labour law. The increasing number of individuals subjected to isolation raises many questions among employers and employees, including as regards days of absence, remote work and similar matters.
The ongoing global outbreak and spread of novel coronavirus 2019 (COVID-19) is a dramatic event of global proportions, with far-reaching implications for a wide range of areas. The spread of COVID-19 directly affects many aspects of commerce and business – both domestic and international. Contract law in Israel provides several tools for dealing with such situations, including the doctrine of frustration, force majeure clauses, 'approximate' or 'cy-pres' performance and consumer protection legislation.
On 16 December 2019 the Haifa District Court determined that so long as shares awarded pursuant to Section 102 of the Israeli Income Tax Ordinance (New Version) are held by a trustee for the benefit of a grantee, they confer no shareholder rights on the grantee. The judgment also reinforced the practice of requiring Section 102 grantees to sign an irrevocable proxy.
In this era of globalisation, there is a growing need for companies and business organisations to relocate foreign workers in order to perform various tasks that require knowledge, expertise or proven management capabilities (whether these tasks be permanent, long term or temporary). This article outlines the steps that employers should take in order to employ foreign workers.
The Employment of Women Law entitles both women and men to certain parental rights, including limitations on the fields of work available to pregnant women, limitations on women's night shifts, the protection of employment during pregnancy, maternity leave (for both women and men) and limitations on termination of employment.
Israeli employment laws set certain limitations on employers' right to terminate employees. For example, according to case law, the termination of employment relationships requires a hearing process, for which specific guidelines have been developed by the labour courts. Employers' obligation to hear an employee before making a final decision regarding their future employment results from employees' basic right to be heard and derives from the rules of natural justice and bona fide obligations.
In a recent decision, a district court in Israel ruled in favour of Broadcom Semiconductor Ltd and rejected the Israeli Tax Authority's claim that Broadcom Semiconductor was required to pay additional taxes of NIS100 million due to the deemed sale of its main functions and assets to affiliated companies. In its decision, the court ruled that a change of a company's business model would not necessarily be deemed as a sale of its assets (and, in particular, a sale of its intellectual property).
Pursuant to Israeli employment law, an employer cannot employ workers on their weekly rest days unless it obtains a special permit from the Ministry of Labour and Social Affairs. On commencement of their employment, employees can notify their employer that they will not work on weekly rest days in accordance with their religious beliefs. Employing workers on their rest day without a permit is a criminal offence, which in certain cases may result in fines for the employer's officers and managers.
The Organisation for Economic Cooperation and Development (OECD) set a goal to deliver by 2020 a final report that includes a consensus approach with respect to the challenges of the digital economy, both the allocation of taxation rights (pillar one) and Base Erosion and Profit Shifting issues (pillar two). What are the latest proposals of the OECD and where does Israel stand?
This article has been removed at the request of the contributing firm.
Israeli employment law is a blend of continental and common law legal systems. Employment protection laws – a set of laws that provide minimum conditions for all employees, irrespective of their wage levels – are at the foundation of employment law in Israel. Failure to comply with these requirements may constitute a criminal offence and further expose an employer to liability for damages.
Collective labour law in Israel is a dynamic and constantly evolving field. In the past decade, many important changes have taken place with respect to collective labour law which have greatly influenced the scope of organised labour. This article examines the legal aspects of organised labour, the protection of the right to organise and the support granted by the labour courts to organisers and the definition of collective bargaining units and workers' organisations.
The second half of 2018 was characterised by a sharp decrease in the number of equity and debt initial public offerings in Israel and a significant rise in bond yields. The Tel Aviv Stock Exchange (TASE) and the Israeli Securities Authority continue to promote various initiatives to encourage non-Israeli issuers to list on the TASE, including the publication of a bulletin clarifying the rules that apply to the public offering of securities, listing and delisting and ongoing disclosures by dual-listed companies.
Israeli and international organisations seeking to employ foreign workers in Israel in management positions or in positions that require special expertise or training must apply for a foreign expert work permit (B/1 permit) from the Population and Immigration Authority. The employment of foreign workers without a proper work permit constitutes a criminal offence, which may lead to fines and other criminal penalties being levied on the employer and its senior management, as well as on the employees.
The Corporate Finance Department at the Israel Securities Authority recently issued its Staff Legal Bulletin on dual-listed companies. The bulletin is a summary of the most up-to-date information on the issuance, reporting, listing and delisting of dual-listed companies and is intended to clarify and reflect these processes for dual-listed companies and companies considering dual listing.
The Law for the Reduction of Cash Use, which came into force on 1 January 2019, imposes certain restrictions on the use of cash and cheques that do not name the payee. The law aims to reduce cash transactions in an effort to fight financial crime and money laundering and foster the use of more modern and efficient payment methods. Violation of the law may constitute a criminal offence, resulting in financial penalties and imprisonment.