preface

8.3.7. Taxation of Realistic Investments
BDO Israel
DOING BUSINESS IN ISRAEL
8.3.7.1. Setting-off Losses from Securities Held by Individuals
8.3.7.1.1. In the context of the 2006 tax reform, the possibility of
setting-off capital losses deriving from securities (whether
negotiable or not) has also been extended to cover income
from interest and dividends.
8.3.7.1.2. Accordingly, a capital loss created as of the 2006 fiscal year
can be set-off against income from interest and dividends
received on the same security from whose sale the loss was
created.
8.3.7.1.3. Additionally, a capital loss can be set-off from a maximum
income and dividend paid on other securities (whether
negotiable or not), provided the tax rate applicable to such
interest income or dividend does not exceed 25%.
8.3.7.2. Setting-off Capital Losses from Securities Held by Company
8.3.7.2.1. Prior to the 2006 Amendment, a capital loss from the sale of a
non-negotiable asset could be set-off again capital gains from
a negotiable or non-negotiable asset. Under the reform, the
possibility of setting off a capital loss deriving from securities
(whether negotiable or not) has been extended to include
income from interest and dividends.
8.3.7.2.2. Accordingly, a capital loss can be set-off from interest
income and dividend paid on the same security in respect of
which the loss was created.
8.3.7.2.3. Additionally, a capital loss can be set-off from interest
income and dividend paid on other securities (whether
negotiable or not) if the tax rate applicable to such interest
income or dividend does not exceed 25%.
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