Tax Law and Taxation
The firm is actively involved in tax planning and structuring of optimal ways of doing business in and out of Israel. Israeli tax law is complex, but suitable tax planning may reveal certain loopholes from which an investor may benefit if used properly. This requires the advice of an expert. The firm is involved in all aspects of tax advice in connection with transactions conducted by its clients, including the preferred structure for tax purposes, the tax consequences of gain derived from the transaction, exemption accorded to foreign investors and other relevant tax issues associated with the clients business. In many cases, the firm also combines its Amsterdam office in providing its clients with a structure that meets the needs of the clients when operating outside of Israel, such as formation of a Dutch company (BV or NV) or another offshore entity.
Israeli tax law has many traps that require the management of a company, particularly publicly traded companies, to carefully review the tax consequences of almost every transaction and/or action of the company over its life span. For example, distribution of a dividend may be exempt from taxation if the recipient is an Israeli resident company and taxable if the recipient is an individual or a non-Israeli resident, whether an individual or a corporation. Accordingly, before taking any action or accepting any major resolutions, it is advisable to consult with a tax expert with regard to the tax aspects of the proposed action.
The tax consequences of an acquisition or merger transaction may be significantly affected by its structure. In addition, Israeli tax law provides for certain tax free reorganizations if certain conditions are met. A clear example for the contrasting tax consequences which may result from the way an acquisition transaction is structured may be found in case of a purchase of a company. The purchasing of the assets of a company may result in substantially different tax consequences compared to the purchase of the company's shares even though both ways end up in the same economic result. Therefore, the advanced review and planning of the proper structure of doing a certain deal is crucial to its success.
Taxation of Non-Israeli Investors
Non Israeli resident investors may be fully exempt from capital gains tax in Israel commencing from 2009. However, the structure of their investment may substantially affect their tax consequences in their country of residence. In addition, the proper structure of financing of the investment may be important and may have substantial impact on the tax aspects depending on whether the investor's country of residence is a party to a tax treaty with Israel or not.
Oil & Gas L.P. Taxation
Under Israeli tax law a partnership is a pass through entity. The taxation is imposed on the partners and not on the partnership whose profits, loses and expenditures are allocated to the partners. There are special tax regulations that provide certain tax benefits to partnerships involved in petroleum oil and gas exploration in order to provide an incentive to investors in such partnerships.
Pre-Rulings and Tax Litigation
In recent years the pre ruling procedure became popular in Israel. Many non Israeli residents investing in Israel request that we would obtain a pre ruling as to their tax consequences and/or certain more specific matter relating to their investment (including investments in start-up companies and venture capital funds). In addition, when no settlement is reached with the tax inspector we represent client who wish to appeal the audit issued to them by the tax assessor.