The Israeli cabinet has approved Minister of Finance Avigdor Liberman's proposal to move ahead with an amendment to the Income Tax Ordinance, as part of which parent companies of multinational groups with annual revenue of more than €750 million will be required to report the full structure of their activities in every country.
The information that Israel will receive will be passed on to other countries that are party to the international agreement, and in exchange Israel will receive information about entities and groups operating within its borders.
The countries participating in the agreement won't be required to raise the level of taxes in their territories above the level of minimum taxation, and the parents companies or other companies in the group, will be required to make up the minimum tax level, which they will transfer to the tax authority in the country in which they are domiciled.
This measure, called a country-by-country report, is the implementation of one of the recommendations of the OECD and G-20 as part of their Base Erosion and Profit Shifting (BEPS) project - an international collaboration to end corporate tax avoidance, and put an end to tax planning strategies that exploit gaps and mismatches in tax rules of different countries.
A bill on the matter was passed in its first reading in the Knesset in 2017 but has since failed to move forward.
Published by Globes, Israel business news - en.globes.co.il - on July 4, 2021
© Copyright of Globes Publisher Itonut (1983) Ltd. 2021