Allan Cinnamon (Cintax the Word Ltd) reports on tax digital trading, applying treaty benefits to partnerships, PE preparatory and auxiliary exemptions and recent treaty highlights
On 2 April the Israel Tax Authority published a draft circular for public discussion that provides for the taxation of online service companies. The circular is confined to foreign service companies with website links to Israeli customers. It derives some of its specific circumstances from the BEPS action 1 report on the digital economy dealing with significant digital presence (SDP).
In contrast to the diverted profits tax (see the January briefing) the circular discusses Israel’s treaty obligations in the context of an Israeli PE. However it emphasises with examples that when certain characteristics of a PE...
