Until 2014, Israeli residents were not taxed on any distributions they received from trusts created by a foreign person with a foreign trustee unrelated to the beneficiaries, and were not even required to report such distributions. This all changed when the Israeli Knesset passed its recent tax reform law, effective Jan. 1, subjecting many previously tax-exempt trusts to significant Israeli income tax liability.
The reporting and tax obligations discussed below are imposed even if there are no trust assets in Israel, no trustee resident in Israel and the settlor is not an Israeli resident. Since the law imposes a number of deadlines that occur in mid-2014 (the deadlines had originally been at the end of January 2014, but were just extended to June 30, 2014), it is essential to plan and comply soon, but further guidance is needed from the Israel Tax Authority before this can be done properly.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
