Income Tax Ordinance [New Version]

"means of control" and "together with another" – as defined in section 88;

"controllers" – shareholders who hold, directly or indirectly, alone, together with another, or together with another resident of Israel, one or more of the means of control at a rate exceeding 25%.

For the purposes of an individual who is not a resident of Israel in the tax year, the Minister of Finance may make rules in order to determine –

The profits of a person who is not a resident of Israel and who is engaged in the business of a shipowner or charterer (in this Ordinance – a foreign shipowner) are exempt from tax, to the extent that the exemption is prescribed in an agreement between the state to which the foreign shipowner belongs and the State of Israel, or if the Minister of Finance has certified that that state acts as though there were an agreement between it and the State of Israel prescribing such an exemption.

Subject to the provisions of section 70, where a vessel owned by or chartered to a foreign shipowner calls at an Israeli port, the full amount of the foreign shipowner's profits derived from the carriage of passengers, mail, live animals or goods (all of which shall hereinafter be called – cargo) loaded in Israel shall be deemed to be income accruing in Israel; this provision shall not apply to goods brought to Israel solely for the purpose of transshipment.

the foreign shipowner's profits derived in Israel from the foreign shipowner's shipping business in that period, before any deduction of depreciation, shall be an amount bearing the same ratio to the receipts from the carriage of cargo loaded in Israel as the ratio of the total profits according to the certificate in that period to the total receipts from the carriage of cargo.

If, for any reason, the provisions of section 72 cannot be applied in a satisfactory manner at the time of assessment, the profits derived in Israel may be computed according to a fair percentage of the total amount of receipts from the carriage of cargo loaded in Israel; provided that if a person is assessed for a particular tax year on the basis of such a percentage, that person shall be entitled, within six years after the end of that tax year, to demand at any time that the person's tax liability for that year be recomputed on the basis prescribed in section 72.

If the assessing officer has decided that a vessel belonging to a particular foreign shipowner called at a port in Israel casually and that there is no reason to expect that this vessel or other vessels under the same ownership will call at Israel, the provisions of sections 71 to 73 shall not apply to the profits from that vessel and no tax shall be imposed thereon.

A person who is not a resident of Israel and who is engaged in the business of air transport or the transmission of messages by cable or wireless shall be assessed for tax as though the person were a foreign shipowner; the provisions of sections 70 to 73 shall apply, with such modifications as the subject matter requires, to the computation of profits and gains from those businesses.

The Minister of Finance, with the approval of the Finance Committee of the Knesset, may make Regulations regarding the deductions and credits to be allowed to a foreign journalist from journalistic work, as well as regarding the rate of tax applicable to such income, and may likewise make such Regulations in respect of a foreign sportsperson in relation to income from engagement in sport; for this purpose –

"foreign journalist" – a non-resident registered with the Foreign Press Association in Israel who arrived in Israel in order to engage in journalistic work, and whose income from journalistic work is received from a non-resident;

"journalistic work" – the preparation of a journalistic report in a newspaper or a broadcast report by means of an electronic mass communication medium, or assistance in the preparation of such a report;

"foreign sportsperson" – a non-resident who arrived in Israel in order to engage in sport;

"engagement in sport" – regular participation in sports games or competitions, in training or in preparation therefor, excluding engagement as a coach in the field of sport, all within an Israeli sports association or sports club.

for this purpose, "relative" – as referred to in section 88, who is a non-resident;

"means of control", "controlling shareholder" and "relative" – as defined in section 75b;

"foreign professional company" – a body of persons that is a non-resident, in which all of the following conditions are met:

"substitute", of a shareholder – a person who received a share from the shareholder in a tax-exempt sale or by inheritance;

"proportionate share of a shareholder in profits from a special profession" – a proportionate share of the total profits from a special profession that were produced or accrued in the tax year outside Israel, in accordance with the rate of the direct and indirect share of a resident-of-Israel shareholder in the rights to profits in the foreign professional company on the last day of the tax year;

"special profession" – an occupation or profession prescribed by the Minister of Finance, with the approval of the Finance Committee of the Knesset;

"profits from a special profession" – profits derived from the taxable income of a foreign professional company that was produced or accrued in the tax year outside Israel and arising from activity in a special profession;

"resident of Israel" – including an Israeli citizen who is a resident of the Area as defined in section 3a.

The Administrator may prescribe provisions, including by way of a tax ruling under section 158c, with respect to all of the following:

and all of this if the Administrator is satisfied that, due to differences arising from the timing of recognition of income or the timing of recognition of an expense, the amount of profits on which tax is to be paid in Israel under section 75b(b) or 75b1(d) exceeds the amount of profits actually generated under the rest of the tax laws in Israel, for a controlling shareholder in a controlled foreign company or for a resident-of-Israel shareholder who is a controlling shareholder in a foreign professional company, as the case may be.