The tax administration of Israel updated transfer pricing declaration Form-1385, which is a declaration by entities regarding their intercompany transactions with related parties.
The tax administration of Israel recently announced that the use of the updated Form-1385 is postponed until the filings of the 2019 tax returns. For tax year 2018, companies can choose to file the updated or the original 1385 Form.
The updated form includes following additional details regarding the intercompany transactions:
- The pricing method used should be accurately defined;
- Specifying the profit level indicator used and the amount of money transferred;
- Information about the related party with whom the transactions were conducted, such as company name, address and tax identification number (TIN);
- Signature of CEO, whereas in the past it was possible to sign on behalf of the company;
- It should be noted whether “safe harbors” were used, as per Income Tax Circular 12/2018.
