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Advance pricing agreements

Availability and eligibility

Are advance pricing agreements with the tax authorities in your jurisdiction possible? If so, what form do they typically take (eg, unilateral, bilateral or multilateral) and what enterprises and transactions can they cover?

Yes, agreements are available – both unilateral (most common) and otherwise.

Rules and procedures

What rules and procedures apply to advance pricing agreements?

Pursuant to the Income Tax Ordinance, discussions and negotiations with the Transfer Pricing Department of the Israeli Tax Authorities (ITA) relate to both future and past transactions. Settling a past or current audit cannot guarantee that the same treatment will be awarded in the future, unless an advance pricing agreement is reached. 

Timeframes

How long does it typically take to conclude an advance pricing agreement?

Several months.

What is the typical duration of an advance pricing agreement?

Three to five years.

Fees

What fees apply to requests for advance pricing agreements?

None.

Special considerations

Are there any special considerations or issues specific to your jurisdiction that parties should bear in mind when seeking to conclude an advance pricing agreement (including any particular advantages and disadvantages)?

In terms of audits by the ITA, it is advantageous to have an advance pricing agreement, although one should take into account whether the results reached in a unilateral advance pricing agreement would be accepted by other relevant jurisdictions.

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