Investors with capital gains will be able to make notional sales of their holdings.
The Income Tax Commission announced today that the 1% transaction tax paid by private investors on the Tel Aviv Stock Exchange as part of the transition arrangement before full implementation of capital gains taxes will be the final tax, and that there will be no need to pay any additional tax on deals made this year. To avoid anomalies between banks and brokers, the Income Tax Commission also announced that customers of brokers who have paid tax on capital gains can obtain rebates that will make the tax paid equal to the 1% transaction tax.
The Income Tax Commission will also allow investors who have accumulated paper gains on their shares to make a notional sale of those shares, to pay the transaction tax on their share dealings, and establish base prices for capital gains tax at the higher level for the next tax year.
This latter decision will prevent massive laundering of capital gains through year-end sales of stocks.
Published by Globes [online] - www.globes.co.il - on December 10, 2003