Israeli Tax Alerts | Practical Interpretations | 2008-2020

5 CHAPTER 3: REAL ESTATE ............................................................................................. 51  T HE D AY OF P URCHASE FOR A PARTMENTS G IVEN AS E XCHANGE IN A C OMBINATION T RANSACTION - THE S HADAMI R ULE (D ECEMBER 2009). .................................................................52  A DDITIONAL E XEMPTIONS I NTRODUCED FOR S ELLING R ESIDENTIAL A PARTMENTS AND N EW P URCHASE T AX R ATES (A PRIL 2011) .....................................................................................53  A P ROPOSED R EFORM IN R EAL E STATE T AXATION IN I SRAEL (J ULY 2011) ...........................................54  I NCENTIVES F OR B UILDING R ENTAL H OUSING (J ULY 2011)...............................................................55  S PACING O UT THE "C OOLING -O FF " P ERIOD FOR A B ETTERMENT T AX E XEMPT U PON A S ALE OF A "Q UALIFYING R ESIDENTIAL A PARTMENT " (D ECEMBER 2011) ..........................................56  P AYMENT O N T IME OF THE T AX FOR R ENTAL I NCOME , IS NOT A C ONDITION FOR THE 10% T AX R ATE (D ECEMBER 2013)...............................................................................................56 CHAPTER 4: CONTROLLED FOREIGN COMPANY (CFC) AND FOREIGN VOCATION COMPANY (FVC) ......................................................................................... 57  F AR -R EACHING C HANGES E XPECTED IN THE CFC AND FVC RULES (D ECEMBER 2013) ..........................58  U PDATE ON L EGISLATION R EGARDING A C ONTROLLED F OREIGN C OMPANY ("CFC") AND A F OREIGN V OCATION C OMPANY ("FVC") (A PRIL 2014) .................................................................60  S HOULD F OREIGN C OMPANIES P ROFITING F ROM S ALE OF R EAL E STATE AND S HARES BE C OUNTED AS CFC S ? (D ECEMBER 2017)........................................................................................60  CFC A SPECTS IN A H YBRID L OAN (D ECEMBER 2017) ......................................................................62 CHAPTER 5: USA-ISRAEL TAX ISSUES ............................................................................ 65  D ISREGARDING A LLP FOR THE APPLICABILITY OF TREATY BENEFITS (A PRIL 2009) .................................66  T AX I MPLICATIONS IN I SRAEL R EGARDING I NCOME OR G AINS G ENERATED T HROUGH A LLC (A PRIL 2011)....................................................................................................................67 CHAPTER 6: ISRAELI GENERAL TAXATION RULES AND LEGISLATION ........................... 69  I LLEGAL E XPENSES W ILL NO L ONGER BE D EDUCTIBLE (J ULY 2009).....................................................70  D EDUCTIBLE E XPENSES - NOT ON I LLEGAL P AYMENTS (D ECEMBER 2009) ..........................................70  R EFORM IN T HE L AW FOR E NCOURAGEMENT OF C APITAL I NVESTMENT - CIT R ATES U PDATE (A PRIL 2011).................................................................................................71  S IGNIFICANT A MENDMENTS - C HANGE OF THE T AX B URDEN ("T RACHTENBERG ") (D ECEMBER 2011) .....................................................................................................................71  I NDIVIDUAL I NCOME T AX - C ONSOLIDATED / S EPARATE C ALCULATION : M ALKIELI R ULING (A PRIL 2012) ...................................................................................................73  F LEXIBILITY IN THE P OSITION OF THE I SRAELI T AX A UTHORITY IN C ASES OF THE A BSENCE OF D OCUMENTATION OF THE C OST OF A SSETS AND C LAIMS FOR E XPENSES (S EPTEMBER 2012) ....................................................................................................................75  U PDATES : L EGISLATIVE P ROCESSES AND T EMPORARY O RDERS (S EPTEMBER 2012) ..............................76  R ECENT F AR -R EACHING C HANGES IN THE I SRAELI T AX L AWS F OLLOWING THE B UDGET L EGISLATION (A UGUST 2013) ......................................................................................................79  T AX C REDIT IN I SRAEL FOR B RANCH P ROFITS T AXES T HAT W ERE P AID A BROAD (J ANUARY 2015)........................................................................................................................83  T HOUGHTS R EGARDING THE T RANSFER OF AN A CTIVITY O UTSIDE OF I SRAEL (A PRIL 2015) ....................85  I NTEREST B EARING S HAREHOLDER L OAN AT A R EDUCED T AX R ATE (A PRIL 2015).................................86  L EGISLATIVE A MENDMENTS ON THE M ATTER OF R EQUIREMENT TO S UBMIT AN A NNUAL T AX R ETURN IN I SRAEL (S EPTEMBER 2016) ...................................................................................88