New Israeli Tax Authority Regulation for Mutual Agreement Procedure under Double Taxation Avoidance Agreements

The Israeli Tax Authority (ITA) has released a new regulation, No. 01/2023, replacing the old No. 23/2001, for Israeli taxpayers who wish to utilize the mutual agreement procedure in accordance with Israel’s double taxation avoidance agreements.

• A request to initiate the mutual agreement procedure must be submitted to the ITA within 3 years from the date when the taxpayer was first notified of an action that led to taxation not in accordance with the tax agreement.
• If the ITA decides to initiate the mutual agreement procedure, it may require the applicant to provide guarantees regarding their tax payments.
• The ITA may agree to initiate the mutual agreement procedure in case of disagreements concerning the applicability of anti-tax avoidance provisions (GAAR) in the tax agreement or domestic legislation.
• Disagreements regarding the calculation of foreign taxes paid will not be considered under the reconciliation procedure, as such offsets are governed by domestic legislation.

Additional details (original in Hebrew)