Corporate taxation

The corporate tax rate in Israel

2013 25.00%
2014 26.50%
2015 25.00%
2016 25.00%
2017 24.00%
2018 23.00%
2019 23.00%
2020 23.00%
2021 23.00%

Companies with a beneficial or approved or preferred enterprise are taxed at a reduced tax rate that varies depending on the circumstances. Capital gains are subject to the standard corporate tax rate. Dividends from foreign sources are subject to a 23% tax with a credit for foreign withholding tax, and in certain circumstances, at the standard corporate tax rate on the grossed up dividend with a credit granted on all foreign taxes paid by the direct and second tier subsidiary on the dividend and the income from which it is distributed.

Transfer pricing

Transfer pricing regulations are found in Sections 85A, 243 and 244(A) of the Israeli Tax Ordinance. They generally follow the OECD Guidelines and requires that all cross-border transactions are carried out between related parties at arm’s-length.


Transfer Pricing Case Law

Case NameDescriptionDateCountriesKeywords