Israel’s tax authority published Income Tax Circular No. 11/2018 and Income Tax Circular No. 12/2018 (September 2018) as guidance on the characterization and selection of the most appropriate transfer pricing method for distribution or sales and marketing activities as well as the introduction of safe harbors for intra-group sales and services activities.
The circulars were originally issued in Hebrew. The KPMG member firm in Israel has provided unofficial English translations of the circulars:
Companies that implement these safe harbors will be relieved from providing what are otherwise mandated comparable benchmark analyses. All other elements of the required transfer pricing documentation remain in place. The described margins for the safe harbor services are to include “direct and indirect [expenses], including expenses that should have been required in accordance with generally accepted accounting principles such as employee options.”
For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services practice in Israel:
David Samson | (+972) 3.684.8970 | firstname.lastname@example.org
© 2020 KPMG International Cooperative (“KPMG International”), a Swiss entity. 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. All rights reserved.
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.