Israel Lowers Tax on International Venture Capital Funds
International funds can now pay an expense-based income tax on capital gains in Israel, instead of a fixed rate of 10%-15%
Omri Milman | 15:18 08.02.2018
International venture capital funds with local offices in Israel will now be able to pay lower income taxes in the country. According to a decision published by the Israel Tax Authority Wednesday, such funds can now pay an expense-based income tax on capital gains, instead of a fixed rate of 10%-15%.
For daily updates, subscribe to our newsletter by clicking here.The change will prompt many investors to consider investments in Israel, said Oz Halabi, a partner at the New York branch of Israeli law firm Pearl Cohen Zedek Latzer Baratz, in a Wednesday interview with Calcalist. Over the last few days the law firm received inquiries from numerous funds looking to understand the implications of the decision, Mr. Halabi said.
According to the precedent published Wednesday, these funds will now be taxed as domestic ones, but only their on-ground expenses will be taxed.The new guidelines are "another positive step" towards easing the taxation burden on foreign investors, and will enable those investors to operate in Israel through local representation more smoothly, Mr. Halabi said.