The tax reform in Israel began in 2003 when the tax system was converted from one of personal taxation to one of global taxation. Since this time, Israeli residents are taxed on their worldwide income. After this reform, on 1 January 2006, the Taxation of Trusts Law (the ‘Law’) came into force. The main purpose of this law is to legislate the use of trusts by Israeli residents which has not been governed by law prior to 2006. The Law imposes obligations based on one's role in connection with a trust (i.e. trustee, settler and beneficiary). Regulations have also been published, which further clarify these obligations under the Law. The publication of these Regulations was much awaited by professionals in Israel and abroad. Their publication was postponed and these were finally published in 2008. However, as the reporting obligation is imposed, among other positions, on trustees, many of whom are...
Journal Article Forced Heirship in Israel: is a choice of law provision in a last will and testament enforceable? Get access Alon Kaplan, Alon Kaplan Alon Kaplan Law Firm1 King David Blvd, Tel-Aviv, Israel E-mail: kaplex@netvision.net.il Search for other works by this author on: Oxford Academic Google Scholar Lyat Eyal, Esq. Lyat Eyal, Esq. Alon Kaplan Law Firm1 King David Blvd, Tel-Aviv, Israel E-mail: lyat@kaplex.com Tel:+972 3 6954463 Fax:+972 3 6955575 www.kaplex.com Search for other works by this author on: Oxford Academic Google Scholar Trusts & Trustees, Volume 11, Issue 4, March 2005, Page 30, https://doi.org/10.1093/tandt/11.4.30 Published: 01 March 2005
The long awaited publication of the voluntary disclosre procedure in Israel came to light on 7 September 2014. As the global trend evidences, this procedure provides taxpayers with the opportunity to disclose unreported income and assets. There are a number of thresholds to pass in order to be eligible for the proceudure, as listed below: Applications are to be submitted to the Deputy Director for Investigation and Intelligence Unit at the Israel Tax Authority who is solely authorized to approve them. Each application will include all relevant information, including, inter alia, applicant’s name, relevant tax years, source of income, details of the amount of unreported income, and estimated tax payment. Once the application is approved, it is referred to the relevant assessment officer who determines the tax liability, including taxes owed, linkage, interest, and civil fines. Upon the payment of all amounts due, no criminal proceedings will be commenced against the applicant.
Israel's Succession Law 1965 is considered a relatively flexible statute in respect of the ability of testators to bequeath their estates. For example, the Succession Law does not prescribe forced heirship rules, as is common in many other jurisdictions, essentially freeing the testator to bequeath his estate, according to his own volition, without extrinsic limitations. Conversely, the Succession Law is considered to be extremely rigid in prescribing the form and manner by which an estate can be lawfully devolved. The Succession Law sets out four forms of wills that are recognized as valid: (i) a handwritten will, which is written entirely by the testator's own hand; (ii) a will made in the presence of two witnesses; (iii) a will made before an authority (e.g. a Judge, an Israeli Notary, etc), and (iv) an oral will, which may be executed by a person on his deathbed. Accordingly, when creating inter vivos trusts, it is important to ensure that such trusts shall not be considered as part of the estate of the settlor as a result of infringing the prohibitions included in the Succession Law. This article provides a brief overview of certain guidelines to be complied with in the course of creating and administering inter vivos trusts, in order for such trusts to continue to exist and to give effect to the purposes for which they had been created following the demise of the settlor.
The summer of 2013 marked a change in Israel’s tax laws, most significantly as they relate to the taxation of trusts and real estate transactions. The Law on the Change of National Priorities (or more commonly known as the ‘Arrangements Law’), passed for budget purposes, amended various laws, including the Income Tax Ordinance [5721] 1961. This article summarizes the amendments regarding the new taxation affecting both Israeli as well as foreign trusts and foundations and the specific changes to real estate taxation for non-residents. The amendments in these two areas are of importance to non-residents as they henceforth may be subject to taxes in areas in which they were previously entitled to exemptions.
Abstract The Israeli Foundation refers to the legal structure of an Israeli private trust, created in combination with an underlying company to hold the trust assets. This article will focus on this structure, as well as on the creation of the Israeli private trust by way of a deed (hekdesh) or by way of a contract. The article will continue by looking into the Israeli real estate trust, which is commonly created by a contract, and finally the article will explore the inheritance procedure in Israel and the issues arising from the conflict between the Trust Law, the Contracts Law, the Succession Law and the Gift Law.
Political changes worldwide, results of general elections such as in the USA or UK, and various changes in the relevant jurisdictions, including relating to tax payments, or amendments to tax benefits, result in greater movement of individuals between various countries. While not all immigration/emigration is tax related, professionals are seeing immigration to jurisdictions granting tax benefits, and emigration from those countries, amending their advantageous regimes. In addition, although outside the scope of this article, certain jurisdictions grant citizenship rights coupled with certain investment opportunities in those jurisdictions.
Israel's new law requiring taxpayers to report aggressive tax planning arrangements to the Israeli Tax Authority requires professionals to consider the reporting implications and the risks when advising clients.
Abstract Recognition of foreign trusts and foundations has been an issue in Israel for many years. Having immigrants from many countries speaking foreign languages and having a legacy of foreign laws and cultures has contributed to the extensive use of foreign trusts in Israel. The Trust Law, and later the Tax Ordinance, as revised in connection with trusts, have endorsed the use of foreign trusts and foundations by non-Israelis investing and doing business in Israel and by Israeli families investing overseas with a requirement for tax and estate planning. In this article, the authors explore the recognition and use of foreign trusts in Israel and give an overview of the respective taxation of trusts.
