Corporate - Significant developments

Last reviewed - 01 July 2022

For companies that have accumulated undistributed exempt profits generated from the special tax regimes under the Approved Enterprise or Benefit Plans of the Encouragement Law, there is a claw-back of corporate tax when such tax-exempted profits are distributed. New Israeli legislation provides for reduced corporate tax rates when the 'trapped profits' are distributed during the one-year period starting 15 November 2021. Certain conditions must be satisfied to be eligible for the reduced tax rate, which include, inter alia, that specific investment requirements have been met.