Question 1

Who are the experts behind Tax-IL?

Accepted Answer

Tax-IL comprises top attorneys, accountants, and tax advisors with decades of experience in Israeli and international taxation, M&A, VC, and complex cross-border structuring. Our partners are regular contributors to trusted Israeli tax publications and have led landmark transactions.

Question 2

Is the initial consultation free?

Accepted Answer

Yes, Tax-IL offers a complimentary initial consultation to understand your unique needs and provide an overview of our services.

Question 3

How do I get started with your team?

Accepted Answer

Contact us via our online form or schedule a consultation. After understanding your case, we create a custom engagement plan, assign our specialists, and kick off with a private call or meeting.

Question 4

How is sensitive financial information handled?

Accepted Answer

We maintain strict client confidentiality, leveraging encrypted communication tools, secure cloud storage, and rigorous privacy protocols compliant with Israeli and EU regulations.

Question 5

How do I set up a company or subsidiary in Israel?

Accepted Answer

To set up a company in Israel, you need to register with the Israeli Registrar of Companies, open tax files (VAT, ITA, Bituach Leumi), and appoint local directors. Tax-IL provides end-to-end entity setup, including obtaining required local permits, drafting articles, and opening bank accounts, ensuring compliance with all Israeli regulations.

Question 6

What are the tax obligations for a foreign-owned Israeli entity?

Accepted Answer

Foreign-owned Israeli companies must file annual tax reports, withhold taxes on dividends, submit monthly VAT and payroll filings, and maintain transfer pricing documentation where applicable. We provide ongoing compliance and tax advisory to optimize international structures.

Question 7

Can you obtain a Preferred Technology Enterprise (PTE) ruling?

Accepted Answer

Yes. A Preferred Technology Enterprise (PTE) status grants reduced corporate tax rates (as low as 7.5%-12%). We specialize in preparing applications, liaising with the Israeli Tax Authority, and designing qualifying technology structures.

Question 8

How does transfer pricing work in Israel?

Accepted Answer

Israeli law requires related-party transactions to be conducted at arm's length. Documentation must be prepared annually, benchmarking against market rates. Tax-IL produces compliant transfer pricing studies and can support negotiations with authorities.

Question 9

How long does company registration take?

Accepted Answer

Full registration and operational readiness (including tax and social security openings) usually takes 2–4 weeks, depending on bank and regulatory processing times. Our team streamlines the process and expedites filings where possible.

Question 10

Do you help with annual filings and audits?

Accepted Answer

Absolutely. We manage statutory filings (annual reports, tax returns), arrange bookkeeping, work with reputable audit firms, and ensure timely compliance.

Question 11

What tax benefits are available to Olim Hadashim (new immigrants)?

Accepted Answer

Olim enjoy a 10-year exemption from Israeli tax on foreign-source income and capital gains, and streamlined procedures for bringing funds into the country. We help plan and document eligibility while maximizing benefits.

Question 12

How can I obtain a tax exemption certificate for selling my company?

Accepted Answer

You must file for an exemption or reduction at the Israeli Tax Authority prior to closing, providing full documentation of the transaction, shareholder status, and prior tax filings. We guide clients throughout the process to secure optimal results and ensure timely filing.

Question 13

Do I need to pay tax if I buy real estate in Israel while living abroad?

Accepted Answer

Non-residents pay the same acquisition tax rates as residents, but international treaties and personal circumstances may affect the obligation. Rental income earned in Israel is taxable. We advise on optimal structuring and assist in securing potential exemptions.

Question 14

How do I prove non-residency for tax purposes?

Accepted Answer

Israeli residency is determined by center-of-life and presence days. To prove non-residency, maintain objective documentation (utility bills, foreign employment contracts, flight logs) and ensure you remain outside of Israel for the majority of the year.

Question 15

What are common mistakes new residents should avoid?

Accepted Answer

Common mistakes include late declarations, failing to plan foreign asset transfers, misunderstanding reporting obligations for trusts/companies, and neglecting to structure family wealth. Early tax planning prevents costly consequences.

Question 16

How do I set up a VC or investment fund in Israel?

Accepted Answer

Setting up a fund structure requires formation of a limited partnership (almost always outside of Israel, depending on circumstances), tax ruling applications (including carried interest rulings), VAT optimization, and KYC compliance. We manage all legal, tax, and regulatory filings and secure relevant authority approvals.

Question 17

What is a carried interest ruling and why is it important for fund managers?

Accepted Answer

A carried interest ruling from the Israeli Tax Authority establishes whether a fund manager's profit share (carry) will be taxed as capital gains or ordinary income. This is relevant for Israeli residents - foreign residents will pay 15% on carry for Israeli-related investments. This pre-ruling is crucial for tax certainty and can significantly impact after-tax returns for managers. Our team specializes in securing favorable rulings based on fund structure, investment risk, and manager capital commitments.

Question 18

Can you help with cross-border fund structuring?

Accepted Answer

Absolutely. We design international fund architectures (master-feeder, parallel funds, GP/LP) that optimize tax, regulatory, and investor base requirements across the US, Europe, and Israel.

Question 19

What are common pitfalls when launching a fund in Israel?

Accepted Answer

Frequent pitfalls include incomplete carried interest planning, misunderstanding management company obligations, and failing to secure pre-determination on taxation of profits. Additionally, people take exposures without knowing exposures for PE and business for the total partnership as it has business activity in Israel. We can resolve this with a signed arrangement with the ITA (ruling) so you'll have clarity that the LPs will be exempt from capital gains related to Israeli investments, and will not need to submit any reports (the default by Israeli law is different, so in the arrangement we get this exemption as well). Early legal and tax review minimizes risk.

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