The taxation of real estate investments is complex and depends on various factors, including the property owner's status (ie, individual or corporation), the nature of the asset (eg, residential property, commercial property or land) and the purpose of the investment (eg, producing rental income or entrepreneurial profit). This article summarises the main factors to be considered when contemplating real estate-related investments in Israel.
The Value Added Tax (VAT) Law sets out that zero-rate VAT applies to the export of services to a foreign resident. However, recent judgments have interpreted such relief in a narrow manner and have significantly reduced the ability to charge zero-rate VAT on services rendered to foreign residents.
In a recent and precedential Supreme Court judgment, the court dealt with the application of the 'innocent insured doctrine' and determined that the doctrine applies in Israel. Hence, where an insurer is entitled to be discharged of liability towards an insured, in some cases, the exemption may not apply vis-à-vis other co-insureds. In this case, the doctrine did not limit the discharge of the insurer.
In light of the COVID-19 outbreak in Israel, and the significant restrictions imposed on foreign nationals entering Israel, the Population and Immigration Authority has issued a series of guidelines regarding visas for foreigners and foreign workers in Israel. This article summarises the relevant instructions.
The outbreak and spread of COVID-19 in Israel is affecting businesses and the movement of individuals, as well as significant reductions in commercial activity. This article examines how COVID-19 will affect insurance litigation and what can be expected in the long term.
The Israeli Competition Authority recently published several clarifications regarding the application of the Economic Competition Law 5748-1988 in light of the COVID-19 pandemic. The clarifications refer to three main issues – namely, collaboration arrangements between competitors, gun-jumping rules in merger cases and postponement of reports required under the Law for the Advancement of Competition in the Food Sector 2014.
The ongoing global outbreak and spread of novel coronavirus 2019 is a dramatic event of global proportions, with far-reaching implications for a wide range of areas, including labour law. The increasing number of individuals subjected to isolation raises many questions among employers and employees, including as regards days of absence, remote work and similar matters.
The ongoing global outbreak and spread of novel coronavirus 2019 (COVID-19) is a dramatic event of global proportions, with far-reaching implications for a wide range of areas. The spread of COVID-19 directly affects many aspects of commerce and business – both domestic and international. Contract law in Israel provides several tools for dealing with such situations, including the doctrine of frustration, force majeure clauses, 'approximate' or 'cy-pres' performance and consumer protection legislation.
On 16 December 2019 the Haifa District Court determined that so long as shares awarded pursuant to Section 102 of the Israeli Income Tax Ordinance (New Version) are held by a trustee for the benefit of a grantee, they confer no shareholder rights on the grantee. The judgment also reinforced the practice of requiring Section 102 grantees to sign an irrevocable proxy.
The Tel Aviv District Court recently approved an appeal filed by Ukraine International Airlines and determined that the provision of alternative flight tickets resulting in a delay of less than eight hours following a delay in the first segment of a journey did not constitute the cancellation of a flight under the Aviation Services Law. The decision overturned a Small Claims Court decision and provides clarity on the meaning of a 'cancelled flight' under Israeli law.
In this era of globalisation, there is a growing need for companies and business organisations to relocate foreign workers in order to perform various tasks that require knowledge, expertise or proven management capabilities (whether these tasks be permanent, long term or temporary). This article outlines the steps that employers should take in order to employ foreign workers.
The Employment of Women Law entitles both women and men to certain parental rights, including limitations on the fields of work available to pregnant women, limitations on women's night shifts, the protection of employment during pregnancy, maternity leave (for both women and men) and limitations on termination of employment.
In a recent decision, the Supreme Court clarified the boundary between maintaining the commissioner of insurance's directive requiring the full grounds and reasons for dismissing a claim to be included in a letter of declination and insurers' right to provide additional details in their statement of defence. The court accepted the insurer's position that it is acceptable to elaborate on declination arguments raised in a letter of declination.
The Haifa District Court and the Tel Aviv District Court recently issued conflicting decisions on the question of whether foreign insurers can file subrogation claims through their insured after paying the insured insurance benefits. In each case, the alleged tortfeasor requested that the court strike out the foreign insurer's claim, arguing that the latter had no right to file the claim in Israel as it was a non-admitted insurer.
Israeli employment laws set certain limitations on employers' right to terminate employees. For example, according to case law, the termination of employment relationships requires a hearing process, for which specific guidelines have been developed by the labour courts. Employers' obligation to hear an employee before making a final decision regarding their future employment results from employees' basic right to be heard and derives from the rules of natural justice and bona fide obligations.
In a recent decision, a district court in Israel ruled in favour of Broadcom Semiconductor Ltd and rejected the Israeli Tax Authority's claim that Broadcom Semiconductor was required to pay additional taxes of NIS100 million due to the deemed sale of its main functions and assets to affiliated companies. In its decision, the court ruled that a change of a company's business model would not necessarily be deemed as a sale of its assets (and, in particular, a sale of its intellectual property).
Pursuant to Israeli employment law, an employer cannot employ workers on their weekly rest days unless it obtains a special permit from the Ministry of Labour and Social Affairs. On commencement of their employment, employees can notify their employer that they will not work on weekly rest days in accordance with their religious beliefs. Employing workers on their rest day without a permit is a criminal offence, which in certain cases may result in fines for the employer's officers and managers.
In February 2019 the Israel Competition Authority (ICA) published for public consultation a draft amendment to Public Statement 1/16: Considerations of the Competition Commissioner in Determining the Amount of a Monetary Penalty. Following public comments on the draft amendment, the ICA has now published a final amended statement. As such, the ICA's new methodology for imposing monetary penalties has taken full effect.
In a recent case, a settlement agreement was concluded between a plaintiff and several defendants that were parties to a claim, which included an allocation of liability and the amount of damages. As a result, the claim against the settling defendants was dismissed. This judgment solves a problem often faced by parties to a tort claim in which one co-defendant objects to a settlement offer and the negotiations are halted as the agreeing defendants fear being exposed as a third party by the objector.
The Organisation for Economic Cooperation and Development (OECD) set a goal to deliver by 2020 a final report that includes a consensus approach with respect to the challenges of the digital economy, both the allocation of taxation rights (pillar one) and Base Erosion and Profit Shifting issues (pillar two). What are the latest proposals of the OECD and where does Israel stand?