This April 11th, 2016, after nearly a year of speculation, the tax authorities of Israel presented their final Circular regarding the taxation of foreign companies providing services through the internet to an audience in Israel.
The Circular does not have the standing of legislation and is, to a degree, in contrast with modern accepted international taxation principles and even in contrast with the already quite progressive anti-tax planning recommendations by OECD of the BEPS project.
These developments are very significant, raise many questions/uncertainty and will trigger additional regulatory (administrative & tax) requirements to most foreign providers of a digital service or good in(-to) Israel.
Partner Henriette Fuchs authored an article, which was published by Lexology, regarding this groundbreaking development.
CLICK HERE to read the full article.