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Minimum Corporate Tax in a Multinational Group Law, 5786-2025

חוק מס חברות מזערי בקבוצה רב-לאומית, תשפ"ו-2025

Published: 2025-12-31Consolidated Hebrew text as of 2026-01-08 · Last amended 2025-12-31✓ Amendment status checked against the Knesset legislation record on 2026-09-28
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Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More

This English text was translated from the official Hebrew using a range of translation tools, and it undergoes ongoing checks and updates. It is not a certified translation.

Despite these checks, it may contain errors, omissions, or imprecise renderings of legal terminology and cross-references, and it may not yet reflect the latest amendments. It cannot be relied upon as a legal text.

The Hebrew text as published in Reshumot (ספר החוקים) and on the Knesset website is the sole authoritative and legally binding version. In any discrepancy, the Hebrew text prevails.

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Chapter V: Powers of the Director and Powers of the Assessing Officer

Powers of the Director and the Assessing Officer pursuant to Chapters II and III of Part 8 of the Ordinance§

9.

The powers vested in the Director and in the Assessing Officer pursuant to Chapters II and III of Part 8 of the Ordinance shall be vested in them for the purpose of supervising the implementation of the provisions pursuant to this Law, with the necessary modifications.

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Chapter VI: Financial Sanction

Section A: Imposition of a Financial Sanction

Financial Sanction for Failure to Report or Failure to Give Notification§
10.
(a)Where an entity has committed a breach of one of the provisions set out in paragraphs (1) and (2) below pursuant to this Law, as specified alongside it (in this Chapter – the breach), the Director may impose on it a financial sanction in the amount specified alongside it:
(1)an entity that is obligated to report pursuant to section 4 and has not transmitted the said report to the Director on time or in the manner prescribed therefor, contrary to the provisions of section 4 – NIS 50,000;
(2)an entity that is obligated to give notification pursuant to section 7 and has not given the Director notification as aforesaid on time, contrary to the provisions of that section – NIS 100,000.
(b)The provisions of sections 195k to 195m of the Ordinance shall apply to a financial sanction pursuant to subsection (a), with the necessary modifications.
Continuing Breach and Repeated Breach§
11.
(a)In the case of a continuing breach, there shall be added to the financial sanction fixed for that breach an amount of one tenth thereof for each complete month during which the breach continues.
(b)In the case of a repeated breach, there shall be added to the financial sanction fixed for that breach an amount equal to the said financial sanction; for this purpose, "repeated breach" – a breach of a provision of this Law as referred to in section 10, within two years of a previous breach of the same provision in respect of which a financial sanction was imposed on the offender.
Reduced Amounts§
12.
(a)The Director shall not impose a financial sanction in an amount lower than the amounts fixed in this Chapter, except pursuant to the provisions of subsection (b).
(b)The Minister of Finance, with the approval of the Finance Committee of the Knesset, may prescribe cases, circumstances and considerations by reason of which a financial sanction may be imposed in an amount lower than the amounts fixed in this Chapter, at rates to be prescribed.
Spreading of Payment of Financial Sanction§
13.
(a)The Director may, upon the application of the offender, decide to spread the payment of the financial sanction, having regard to the amount of the financial sanction imposed on the offender and to other special circumstances that justify such spreading, provided that the number of payments shall not exceed 12 monthly payments.
(b)Where the offender has complied with the spreading of payments as aforesaid, linkage differentials and interest shall not be added to the offender's debt during the spreading period.
(c)Where the offender has not paid a payment on time, the Director's decision to spread the payment as referred to in subsection (a) shall be deemed to be void, the balance of the debt shall fall due for immediate repayment, and the provisions of section 195r of the Ordinance shall apply.
Application of Provisions from the Ordinance concerning Financial Sanctions§
14.

The provisions of sections 195p to 195t, 195v and 195w of the Ordinance shall apply to a financial sanction pursuant to section 10, with the necessary modifications.

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Section B: Administrative Warning

Administrative Warning§
15.
(a)Where the Director has reasonable grounds to believe that a person has committed a breach of a provision pursuant to this Law, as referred to in section 10, and the circumstances prescribed by the Director in procedures, with the approval of the Attorney General, have been met, the Director may, in lieu of imposing on the person a financial sanction pursuant to the provisions of Section A, issue the person an administrative warning pursuant to the provisions of this Section; in this subsection, "Attorney General" – including a Deputy Attorney General authorised by the Attorney General for this purpose.
(b)In an administrative warning, the Director shall state what act constitutes the breach and the date of its commission, shall notify the offender that the offender must cease the breach and that if the offender continues the breach or repeats it the offender shall be liable to a financial sanction for a continuing breach or a repeated breach, as the case may be, as referred to in section 17, and shall also state the offender's right to request the cancellation of the warning pursuant to the provisions of section 16.
Application for Cancellation of an Administrative Warning§
16.
(a)Where an administrative warning has been issued to an offender as referred to in section 15, the offender may apply to the Director in writing, within 30 days, to cancel the warning on any of the following grounds:
(1)the offender did not commit the breach;
(2)the act committed by the offender, as set out in the warning, does not constitute a breach.
(b)The Director may extend the period referred to in subsection (a), for special reasons to be recorded.
(c)Where the Director has received an application for the cancellation of an administrative warning pursuant to the provisions of subsection (a), the Director may cancel the warning or reject the application and leave the warning in force; the Director's decision shall be given in writing and shall be delivered to the offender together with reasons.
Continuing Contravention and Repeated Contravention after a Warning§
17.
(a)Where an administrative warning was given to a contravener pursuant to the provisions of this Section and the contravener continued to contravene the provision on account of which the warning was given to him, that contravention shall be deemed a continuing contravention for the purposes of section 11(a), and the Director shall give the contravener a notice of intention to impose liability in respect of the continuing contravention, in accordance with the provisions of section 195k of the Ordinance, mutatis mutandis.
(b)Where an administrative warning was given to a contravener pursuant to the provisions of this Section and the contravener again contravened the provision on account of which the warning was given to him, within two years from the date of delivery of the warning, the additional contravention as aforesaid shall be deemed a repeated contravention for the purposes of section 11(b), and the Director shall give the contravener a notice of intention to impose liability in respect of the repeated contravention, in accordance with the provisions of section 195k of the Ordinance, mutatis mutandis.

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Section C: Miscellaneous Provisions

Stay of Execution and Refund§
18.
(a)The filing of a petition with the Administrative Affairs Court against a decision of the Director under this Chapter shall not constitute a stay of execution of the decision, unless the Director has agreed thereto or the court has so ordered.
(b)Where the court has decided, after the financial sanction has been paid, to grant a petition as referred to in subsection (a) or an appeal against a judgment in such a petition, and the court has ordered the return of the amount of the financial sanction paid or the reduction of the financial sanction, the amount paid or any part thereof that was reduced, as the case may be, shall be returned together with linkage differentials and interest from the date of its payment until the date of its return.
Temporary Provision in respect of Chapter VI§
19.

During the period from the date of commencement of this Law until the end of four years from that date, the Director shall not give a contravener a notice of intention to impose liability, unless the Director has required the contravener to rectify the contravention and has warned the contravener, in writing, that if the contravention is not rectified within 60 days from the date of delivery of the warning, a notice of intention to impose liability will be given to the contravener.

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Chapter VII: General Provisions

Implementation and Regulations§

20.
(a)The Minister of Finance is responsible for the implementation of this Law.
(b)The Minister of Finance, with the approval of the Finance Committee of the Knesset, may prescribe in Regulations provisions on the following matters:
(1)provisions in respect of the calculation of the supplementary domestic tax to be imposed on an Israeli constituent entity under section 3, including in respect of providing the possibility of choosing among several alternatives in respect of the manner of calculating the supplementary domestic tax or reporting thereon;
(2)the manner of converting the currency of one country to the currency of another country for the purpose of calculating and paying the supplementary domestic tax.
(c)The Minister of Finance, with the approval of the Finance Committee of the Knesset, shall prescribe an exemption from reporting under section 4, in whole or in part, or from payment of supplementary domestic tax under section 8, in whole or in part, as referred to in section 8.2 of the Rules.

Special Reporting Period§

21.

The Director may, at the request of an Israeli constituent entity or at the request of a filing entity, determine that the tax year for the purpose of calculating the supplementary domestic tax and reporting thereon shall be a period of 12 consecutive months beginning on a date other than 1 January, as determined by the Director; where such a period has been determined, it shall apply in respect of all entities in that multinational group in Israel.

General Provisions§

22.

Provisions under Part 10 of the Ordinance shall apply, mutatis mutandis, in respect of this Law.

Amendment of the Schedule§

23.

The Minister of Finance, with the approval of the Finance Committee of the Knesset, may, by Order, amend the Schedule; where an update of the Rules has been approved by the OECD, the Minister of Finance shall amend the Schedule, in the manner aforesaid, in accordance with the updated Rules approved as aforesaid.

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Chapter VIII: Indirect Amendments

Amendment of Income Tax Ordinance – No. 284§

24.

In the Income Tax Ordinance [New Version], in Section 32(7), at the end thereof there shall come: "or as a domestic top-up tax as defined in the Minimum Corporate Tax in a Multinational Group Law, 5786-2025".

Amendment of the Administrative Affairs Courts Law – No. 153§

25.

In the Administrative Affairs Courts Law, 5760-2000, in the First Schedule, in item 32, at the end thereof there shall come:

"(12) A decision of the Director under Chapter VI of the Minimum Corporate Tax in a Multinational Group Law, 5786-2025.".

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Chapter IX: Commencement, Application and Transitional Provision

Commencement and Application§

26.

This Law shall commence on the 12th day of Tevet 5786 (1 January 2026) (in this Chapter – the commencement date), and it shall apply in respect of the income of an Israeli constituent entity from the tax year that began on or after the commencement date.

Initial Regulations§

27.

The initial Regulations under section 20(c) shall be brought for the approval of the Finance Committee of the Knesset no later than the 16th day of Tammuz 5786 (1 July 2026).

Transitional Provision§

28.

Notwithstanding the provisions of section 7(a), an Israeli constituent entity to which the Rules apply on the commencement date shall give the Director a notice as referred to in that section within one year from the commencement date.

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Schedule (Section 2, the definition of "the Rules")

For the text of the Schedule

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