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02 May 2018

Israeli Supreme Court rules stock based compensation to be included in cost base for transfer pricing

The Israeli Supreme Court ruled on April 22, on two appeals made by Kontera Technologies Ltd. (Kontera) and Finisar Israel Ltd. (Finisar) and counter appeals by their assessing officers, where both cases addressed the Israeli tax treatment of stock based compensation (SBC) expenses in contract research and development arrangements, which are typically remunerated on a cost plus basis. The Israeli Supreme Court ruled in favor of the Israeli Tax Authorities (ITA), including a secondary adjustment.

A Global Tax Alert, attached below, provides additional details.

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Document ID: 2018-0930

 

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