On 11 January 2019 the UK and Israel signed a protocol to update the double tax agreement between the two countries, incorporating tax treaty related recommendations of the OECD project on base erosion and profit shifting (BEPS).
The protocol will facilitate investment by reducing the withholding tax rates on dividends paid from Israel. The protocol also provides for reduced rates of Israeli tax on dividends and interest and eliminates Israeli withholding tax on royalties. UK pension schemes will not be liable to withholding tax on payments of dividends and interest from Israel.
The protocol also introduces provisions on limitation of benefits to ensure that only companies engaged in genuine business activities can benefit from the treaty; and updates provisions on the exchange of information between the UK and Israel tax authorities.
The protocol is not yet in force.
