Analysis by Herzog Fox & Neeman, Taxand Israel
The Israeli Ministry of Finance has proposed a bill aimed at enhancing transparency in tax law and aligning with international information exchange standards. Prompted by an OECD audit finding Israel non-compliant with international transparency standards, the bill seeks to avoid potential EU blacklisting and economic sanctions.
Meir Linzen and Guy Katz from our Israeli firm, Herzog Fox & Neeman, analyse the bill in more detail. Read the full article shared below.
PROPOSED BILL TO CANCEL EXEMPTIONS FOR NEW IMMIGRANTS AND MANDATE REPORTING OF BENEFICIAL OWNERS
On February 21, 2024, the Israeli Ministry of Finance released a proposed bill aimed at enhancing transparency in tax law and aligning with international information exchange standards.
This bill has not yet been ratified by the Israeli government or Knesset. It’s crucial to note that changes may occur before its final enactment.
Prompted by an OECD audit finding Israel non-compliant with international transparency standards, the bill seeks to avoid potential EU blacklisting and economic sanctions. It introduces two key amendments:
1) Cancellation of Reporting Exemptions for New Immigrants and Veteran Returning Residents
Currently, new immigrants and veteran returning residents enjoy exemptions from reporting non-Israeli source income and assets. The bill proposes limiting these exemptions in three significant ways:
Despite these changes, the bill clarifies that tax exemptions (but not reporting exemptions) on foreign-sourced assets and income for new immigrants and veteran returning residents will remain intact.
The amendment will apply to individuals becoming Israeli residents from June 1, 2025.
2) Introduction of Beneficial Owner Reporting for Israeli Companies and Trusts
The bill introduces two key amendments in connection with reporting of beneficial owners of Israeli companies and trusts:
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