preface

BDO Israel
DOING BUSINESS IN ISRAEL
The tax rates to be applied are 6% in Priority Region A and 12% in all
other areas (for the 2015 fiscal year; 10% and 15% respectively for the
2011–2012 fiscal years; and 7% and 12.5% respectively for the 2013–
2014 fiscal years). The rate for individual recipients of dividends under
the tax benefits track will be 15%, both for Israeli as well as foreign
residents, while intra-corporate dividend distributions will be exempt
from tax even if derived from the subsidiary’s "preferable income".
7.2.2.1. Conditions for Enjoying the Tax Benefits Program
An enterprise wishing to enjoy these benefits is not required to
apply to the tax authorities, but may independently implement
them in its income tax returns.
The terms stipulated by law for obtaining tax concessions are as
follows:
1. The enterprise must be owned by a company registered in
Israel and the business of which is controlled and managed in
Israel, apart from a “family company”, a “transparent
company” or a Kibbutz. The law will also apply to registered
partnerships, provided they have all been incorporated in
Israel. Factories and quarries for producing natural resources
(minerals, gas and oil) will be excluded from the definition of
"industrial enterprises" in regard to this particular activity.
Companies fully owned by government bodies will not be
entitled to the benefits granted under the law.
The company must maintain admissible books and records
and file any reports required under Israeli law. The company
and its officers must be free of previous convictions on taxfraud
charges during the 10 years preceding the benefits
periods.
2. The enterprise must be an industrial plant.
3. The enterprise is competitive and contributes to the Gross
Domesticl Product. An enterprise will be deemed to have
fulfilled this condition if it is engaged in biotechnology,
nano-technology or renewal energies R&D and has obtained
the approval of the Head of Industrial R&D Administration 1 .
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