Recently, the Israeli Tax Authorities (the "ITA") published a press release introducing a new "Green Lane" which is intended to ease the process of funds transferring from Israel to non-Israeli recipients for investment purposes (the "Green Lane"). Under the new Green Lane, Israeli banks will allow the transfer of funds for investment purposes from Israel to foreign bank accounts, without withholding of tax, based solely on a declaration signed by the transferor. The Green Lane represents a significant change in the ITA‘s policy. Until recently, the ITA required that any Israeli resident, who wishes to transfer money abroad, must obtain a positive confirmation from the ITA that the transfer is not subject to withholding of tax. In the absence of such a confirmation the payment was subject to such withholding. In order to benefit the Green Lane, all of the following criteria must be met:
- The funds are being transferred to a resident of a country that has signed a tax treaty with Israel ("Treaty County");
- The funds are being transferred to a bank account located in a Treaty Country;
- The funds are transferred as a payment for any one of the following:
- Investment in stocks;
- Investment in non-Israeli real estate;
- Investment in other non-Israeli tangible assets;
- Provision of a loan to a non-Israeli corporation; or
- Provision of an owner's loan to a corporation.
- Completion and execution of a 2513/2 form.
It should be noted that the transferor must keep, and if required, produce proper documentation regarding the payment. It is expected that this new Green Lane policy will now make it easier for Israeli residents to make investments in foreign companies and foreign real-estate.