Category: English

Proposed amendment to the Israeli Income Tax Ordinance regarding the taxation of digital assets

December 20, 2024

The Ministry of Finance has recently published a memorandum of law (the “Memorandum”) for the amendment of the Israeli Income Tax Ordinance (the “Ordinance”) aimed at clarifying the taxation of “digital assets”. This proposal came as a result of Israel’s state comptroller criticizing the Israeli tax authority for inadequate enforcement of taxation of cryptocurrency transaction potentially resulting in billions of lost revenues. This proposed memorandum with respect to taxation of cryptocurrency is in accordance with the government’s decision on “Promoting Regulation of Activities in Digital Assets” and to enhance certainty in taxation concerning economic activities involving digital assets for businesses, investors and consumers. 

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Overview of crypto taxation in Europe and Israel

November 24, 2024

The explosive growth of the crypto market globally and within Europe has caught the attention of governments and tax authorities eager to ensure compliance and maximize revenue collection. At the same time, many individuals seek clarity regarding their tax obligations as banks often refuse to accept funds connected to crypto without anti-money laundry clearance and tax clearance.

Please find a PowerPoint presentation on the differences and similarities in tax regulations in Europe and Israel regarding the taxation of crypto transactions.

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Inheritance Law, Forced Heirship Rules and Enforcement of Judgements

October 16, 2023

At the STEP Europe Conference in Budapest I have been one of the speakers on the panel about Inheritance Law and Forced Heirship Rules. I explained the Israeli Succession Law. One of the cornerstones of Israeli Succession Law is the freedom of testation. There is no forced heirship rules in Israel. However, forced heirship rules can become relevant, if an Israeli resident has foreign assets. Possible to avoid the application of forced heriship rules by choice of law under the EU Succession Regulations or by a genuine foreign or Israeli trust. 

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Relocation of High Net Worth Individuals: Immigration, Tax Residence, Preferential Tax Regime, Common law Trusts and other Wealth Planning Issues

October 15, 2023

At the STEP Europe Conference in Budapest I was the moderator for the panel about Relocation of High Net Woth Individuals. We touched on immigration issues, gave an update on individual tax residency, discussed various preferential tax regimes, such as the regime in Portugal, Spain, Italy, Israel and Cyprus. In addition, we discussed tax implication in case a person relocates with a common law trust or similar vehicle in his “backpack”. For further reading please have a look at our joint power point presentation. 

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Lessons from the Pandemic: Towards new principles for tax residence of individuals and corporations

November 29, 2022

Where is your tax residence? A major concern for wealthy families is to navigate residence and mobility. With families running businesses in multiple jurisdictions, children being educated in foreign countries and people spending time in different countries in a given year, the question arises : Where is your tax residence? We have examinded the rules of 5 different jurisdicionts: Germany, Israel, Italy, Spain and the Netherlands. A discussion followed about the various preferential tax regimes in Europe and in Israel (Aliya regime, Beckham law, impatriate etc.) and their potential future. In addition, we discussed challenges of relocation in light of exit tax, continued income tax liability despite departure, step up of assets, inheriance and gift tax implications in Germany, Italy, Israel, Spain and the Netherlands. At the STEP Europe Conference in Luxembourg we also discussed the impact on family businesses if one or more family members do relocate.

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DAC6 & Proposed Unshell Directive at the STEP Israel Conference

October 18, 2022

At the Annual STEP Israel Conference, I have been the moderator for a panel, where we discussed DAC6 (Directive of Administrative Cooperation volume 6) and the proposed Unshell Directive. DAC6 is an additional tax transparency initiative implemented as EU Directive in 2018, which calls for a mandatory disclosure of reportable cross-border tax arrangements by “intermediaries”, so called “gate-keepers” including law firms, accountants, and auditors.  With “Unshell” a proposed EU-Directive, published December 2021, the EU- Commission wants to tackle the use of “Shell-entities”, so called letter-box entities, “Briefkastengesellschaften” in the European Union.  In the proposed draft the European Commission lays down a “new substance test” subject to exchange of information for entities in the European Union. Lawyers from France, Italy and Germany discussed these two initiatives with me.

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German Tax Residence

October 13, 2022

German Tax Residence can be established quite easily. You establish German Tax Residence either when your “home” is  in Germany or your habitual abode/stay is in Germany. In order to estalish a home in Germany it is not important whether you have your centre of vital interests in Germany and there is no minimum day requirement.

Be carefuld not to establish unintended Tax residency with German income and inheritance/gift tax consequences.

Read more>https://law-intax.com/wp-content/uploads/2022/10/German-Tax-Residency-5.pptx

Proposed New Profit Allocation and Global Minimum Tax: OECD Agreement on the Two Pillar Solution and the Effect on Israel

August 19, 2021

A historic global statement has been signed by 132 members of the OECD Inclusion Framework (including Israel) which intends to bring fairness and stability to the international corporate tax framework and will lead to a complete reform of the international corporate tax system. The proposed reform is based on a Two Pillar Solution developed by the Inclusive Framework to address tax challenges arising from the digitalization of the economy. Pillar One of the proposal provides new nexus rules for the allocation of profits of a Multinational Enterprise (MNE) to countries where MNEs do business and where products and services are used and/ or consumed without having a physical presence.  Pillar Two provides for a global minimum effective tax rate of at least 15 % for MNEs which will help to curb aggressive tax planning and stop the corporate tax “race to the bottom”.

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