|On August 6, 2017, long-awaited legislation was finally published. This legislation relaxes many restrictive limitations previously imposed by the Israeli tax-free reorganization law (the “Reform”). The Reform expands the availability of corporate Israeli tax-free reorganizations, such as mergers, divisions, stock-for-stock exchanges, and other forms of intra-group asset transfers.
The Reform opens various possibilities for simplification of multi-national structures involving a number of Israeli subsidiaries that were previously impossible. It also expands the availability of new corporate acquisition transaction structures, where the consideration is paid, in full or in part, in shares of the acquiring company.
A major motivation of this Reform was to support the Israeli hi-tech industry by removing regulatory impediments on investments in these companies and limitations on business restructurings.
We provide below a general summary of certain key amendments as reflected in the Reform: