Israeli Tax Alerts | Practical Interpretations | 2008-2020

202 the trustee. In such case, the income of someone who has severed its residency in accordance with a treaty, wouldn't be taxed. The Tax Authority may claim, on the other hand, that the "tiebreaker" conditions that are included in the tax treaty relate solely to the place of residence of individuals and not to entities that are not individuals, including trusts. Moreover, in treaties in which trusts are explicitly mentioned, there is no clear solution, since sometimes a trust is simply included in the term "person" in a general and ambiguous manner (for example - in the treaty with Canada), or it is determined in a treaty (including in a protocol to a treaty) that in the case of double residency, the matter will be decided by way of mutual agreement (for example in the treaties with Austria, Panama and Malta). As mentioned above, because of the expectation that there will be a multitude of situations in which the severance has been made in accordance with a treaty alone, this issue is expected to have an honorable place in discussions that are held with the tax authority on the subject. (July 2019)