New legislation encourages Israeli companies to repatriate 'trapped profits' at a reduced tax cost

European Tax Newsalert

Legislation enacted recently by the Israeli Parliament should interest certain Israeli companies with undistributed tax-exempt profits that they have retained because of the potential tax burden upon repatriation. Such profits were exempt from corporate tax as long as they are not distributed and are commonly known as 'trapped profits'. The new temporary provision provides an incentive for certain companies owned by multinational investors to repatriate trapped profits to their shareholders.

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