Tax representation and guidance

“The determination, and the fact, that the parties involved chose a legal-low-tax type of structure does not necessarily reflect or indicate an “artificial” and/or hidden structure of any kind.  It is the right, and some say obligation, of experts in tax matters to plan legal transactions such that they will not be tax-intensive.” (Supreme Court then-president Meir Shamgar: Civil follow-on hearing 3017/94, Hazon David et al v Land Betterment Tax Administration.

The business sector has constantly strived to reduce the effective tax obligation through legitimate ways.  Its behavior vis-à-vis the tax authorities requires broad knowledge, an acquaintance with the stages of representation and being constantly UpToDate with changes in the field.  We have many years of experience in this field which gives us the expertise in holding tax discussions with the Israeli tax authorities (Income Tax, VAT, and National Insurance Institute), including with in implementing encouragement laws and in formulating tax assessment agreements and trusteeship agreements for international companies that engage in business activity in Israel.

We specialize in guiding developers’ transactions and business activity in terms of investment in Israel and abroad, guidance of negotiation processes up to the formulation of commercial agreements and drafting binding agreements (in conjunction with legal counsel) up to signing, while emphasizing the optimal tax structure in the relevant circumstances.

• Representation in tax discussions – Income Tax, VAT, and National Insurance Institute: Highly experienced in tax discussions with the Tax authorities in Israel to achieve the best outcome for your business.
• Tax consultation and planning:

Tax planning is a professional process that is consistent with Israeli tax law through which one can reduce tax liabilities Tax planning is intended for any person or firm that is interested in examining the possibility of reducing tax payments within the law or alternatively, who is dealing with a complex business, financial, level situation concerning various tax issues.

• Real estate and land taxation – Israelis’ with investments in real estate abroad and nonresidents investments in real estate in Israel:

According to assessments by experts in the financial field, the State’s coffers are enriched every year due to faulty and/or deficient tax planning which results in tax payers not insisting on their rights achieving the optimal tax assessment.

One of the characteristic elements of real estate transactions is the multiplicity of taxes and various compulsory payments that may apply to property transactions.

Every taxpayer has the legal right to plan his business steps in advance such that he will save taxes.  The taxpayer has the right to defer tax payments if this is possible within the restrictions of the law.  Since legal provisions are intended to make it easier on taxpayers, they have the right, and even obligation, to take advantage of such provisions to optimize the process. We will examine all of the data from the transactions involved through all stages and recommend the optimal course of action intended to maximize returns

• Voluntary disclosure:

We have accumulated experience in voluntary disclosure processes vis-à-vis the tax authorities, by which an individual or a business voluntarily discloses tax violations it has committed.  These cases defined as voluntary disclosure when the tax authority does not have information on the matter or has still not initiated an open or covert investigation in the matter.

Those who owe taxes and have committed tax violations may be entitled to full immunity from criminal proceedings We have dealt with anonymous disclosures (approved for limited periods from time to time; recent one ended on December 31, 2019).

• The capital markets

Capital gains tax in Israel is imposed as part of the Income Tax Ordinance.  The tax is imposed on the realization of assets such as securities, reputation and more.  The tax imposed on capital gains from the sale of real estate in Israel is called “Land Betterment Tax”.  The tax on most capital gains in Israel was 20% in 2012, and increased to 25% with some exceptions that are taxed at just 15%.

In order to determine the effective capital gains tax rate, we examine the following criteria together with the firm’s clients:

• The distinction between capital income and proceeds income
• At source tax deductions from foreign securities
• Israeli tax exemptions in respect of taxation in foreign countries
• Treaties to prevent double taxation
• Offsetting capital losses in Israel
• Offsetting losses on foreign securities
• The Israeli authorities’ attitude toward digital currencies and their classification for tax purposes
• Taxation decisions (ruling)

A “tax decision” is a decision concerning tax indebtedness, tax results, or the implications of tax indebtedness due to an action taken by an entity requesting a tax decision or due to income, profit, expenditure, or loss that he has accrued. A tax decision will be handed down by the institute for tax decisions before the action is taken, and in certain cases even after it is taken.

The Head of the Tax Authority is permitted to set out a tax decision with or without an agreement or to determine that no tax decision will be issued.  Should the Head of the Tax Authority set out a tax decision it cannot be rescinded unless all the information has been provided or a change in circumstances, or if misleading, mistaken or false information has been submitted.  Anyone requesting a tax decision will not be able to rescind the request unless it is with the approval of the Head of the Tax Authority.

The firm has experience in submitting requests for tax decisions sometimes as part of a larger team.  After examining all of the data and circumstances specific to the case, our professional team will recommend an optimal course of action that combines reducing excess tax exposure with a simple and direct transaction structure that is tailored to the challenges of the business world.

Smart Accounting. Optimal effective Tax.