Cabinet approves OECD plan to avoid corporate taxes


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Finance Minister Avigdor Lieberman is proposing to amend the income tax law so that Israel can join the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting (BEPS) project. The Israeli Cabinet has approved Finance Minister Avigdor Lieberman’s proposal to move forward with an amendment to the Income Tax Law, in which parent companies of multinational groups with annual revenues of more than 750 million euros will be required to report the full structure of their activities in each country. The information that Israel will receive will be transmitted to other countries that are party to the international agreement, and in return Israel will receive information about entities and groups operating within its borders. Countries participating in the agreement will not be required to raise the level of taxation in their territory above the minimum tax level, and parent companies or other companies in the group will be required to compensate the minimum tax level, which they will pass to the tax authority of the country in which they reside. The measure, called a Country-by-Country Report, is to implement one of the recommendations of the Organization for Economic Co-operation and Development and the Group of Twenty as part of the Basic Erosion and Profit Shifting Project (BEPS) – an international collaboration to end corporate tax evasion, and end tax planning strategies that exploit loopholes and mismatches in Tax rules of different countries. A bill to that effect passed its first reading in the Knesset in 2017, but has since failed to move forward. Published by Globes, Israel business news – en.globes.co.il – on July 4, 2021 © Copyright Globes Publisher Itonut (1983) Ltd. 2021 Avigdor Liberman Photo: Knesset spokesman Yaniv Naddaf


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