On 22 September 2022, the Israeli Official Gazette published the Income Tax Regulations 2022, amending the Income Tax Ordinance, which adopted on 30 June 2022 for the introduction of the three-tiered transfer pricing documentation requirements of BEPS Action 13.
The amendments to the Regulations are including:
- TP documentation requirements in line with the OECD Local file guidelines;
- A Master file requirement is required for members of MNE groups with turnover exceeding ILS 150 million;
- The ultimate parent entities of MNE groups meeting a consolidated revenue threshold of ILS 3.4 billion are required to submit a CbC report within 12 months following the end of the reporting fiscal year;
- The reduction of time limit to submit TP documentation (Local file) and Master file from 60 days to 30 days following a request by the tax authority; and
- Enhanced disclosure requirements are introduced as part of the annual tax return.
The amendments to the Regulations apply from tax year 2022, although companies may submit a CbC report for the 2021 tax year as well, which is due by 31 March 2023.
