Share with your friends

Israel: Country-by-country reporting, transfer pricing documentation in budget plan

Israel: CbC reporting in budget plan

The Israeli government on 12 August 2016 approved the Ministry of Finance’s budget plan for 2017-2018 that includes tax legislative measures that the Israeli government is planning to introduce in the bi-annual budget proposal. Among the tax provisions are measures for country-by-country reporting and transfer pricing documentation requirements.


Related content

Tel Aviv at night

The budget plan [Hebrew] [PDF 1.95 MB] and the related tax measures are pending approval by the Knesset (Israel’s legislature). The following brief description provides a high-level overview of the country-by-country reporting and transfer pricing documentation measures in the budget plan.

CbC reporting

The budget plan sets out country-by-country (CbC) reporting requirements that generally would be in line with OECD base erosion and profit shifting (BEPS) Action 13 recommendations. These CbC rules would apply to a multinational enterprise (MNE) group that has total group revenue in excess of NIS 3.4 billion (approximately €799 million).

Specifically, the budget plan provides for the following general CbC rules:

  • The ultimate parent entity of an MNE group would be required to file a CbC report if it is a tax resident of Israel for the fiscal year. 
  • However, an ultimate parent entity may be exempt from filing a CbC report, if such report has been filed by another member of the MNE group. 
  • The CbC report would be filed electronically (online) within a year as of the end of the fiscal year.

The budget plan also provides, as a general requirement, that any taxpayer that is affiliated with an MNE group would have to certify its status as a group member to the tax authority.

Transfer pricing documentation

The budget plan also contemplates the imposition of transfer pricing documentation and recordkeeping requirements on any taxpayer that belongs to an MNE group, or that has engaged in a related-party cross-border transaction. The provisions concerning transfer pricing refer to a transaction under section 85A of Israel’s Income Tax Ordinance or law (section 85A is the primary legislative provision on transfer pricing, and generally its application is limited to related-party cross-border transactions).

Upon demand, the taxpayer would be required to furnish to the tax authority:

  • Documents and data subject to the documentation and recordkeeping requirements 
  • Documents and data relating to the MNE group 
  • All documentation and data relating to either a related-party cross-border transaction, a foreign resident that is party to such transaction(s), or any entity that is affiliated with the MNE group to which a party to such transaction(s) belongs 
  • The transfer pricing method applied for purposes of such transaction(s)    


For more information, contact a KPMG tax professional:

Tal Karni | +1 (267) 256 4593 |

© 2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.

KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. For more detail about our structure please visit

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us