Thursday, 19 May 2016

Israeli Tax Authority releases first guidance related to e-commerce

The Israel Tax Authority (ITA) on April 11, 2016, published Circular 4/2016 (the Circular), which addresses taxation of foreign companies that operate in Israel through e-commerce and online services (also known as the 'digital economy').

The Circular represents the first time the ITA has published its views on online service income and income from the sale of products generated by a foreign company online. The Circular also describes the tax treatment of such companies residing in countries that both have and have not entered into a tax treaty with Israel.

The Circular also addresses when a foreign company providing services via the internet must register for Israeli value-added tax (VAT). Taxpayers should review the ITA's guidance if they generate or intend to generate e-commerce income from Israeli customers.

Source & more info: PwC