Monday, 22 February 2016

Israeli District Court rules ESOP expenses should be included in the cost plus compensation

An Israeli District Court ruled regarding a transfer pricing issue and held that an Israeli subsidiary of a US parent company which provided R&D services to the US parent company in consideration for compensation determined on a cost plus basis, must include in its costs the employee stock ownership plan (ESOP) expenses relating to US parent company options granted to the Israeli company's employees (Finisar Israel Ltd v. Rehovot Assessing Officer, January 14, 2016).
This decision follows another recent case in late December 2015 in which a similar ruling was issued by the same judge sitting in the Israeli District Court.
Source & more info: PwC