13 September 2018 Israel's Tax Authority releases circulars on transfer pricing methods and profitability ranges in certain local transactions The Israeli Tax Authority (ITA) finalized two circulars on transfer pricing (TP) on September 5. The final circulars feature a few changes to the earlier drafts published at the end of last year, the most significant being the explicit inclusion of stock options in the cost base for a markup on total costs model. One of the circulars focuses on appropriate TP methods relating to distribution, marketing, and sales by multinational enterprises (MNEs) in the Israeli market, while the other focuses on specific profitability ranges for certain transactions. The circulars provide the ITA's position regarding methodology and profitability of various types of transactions, while facilitating documentation and reporting requirements. Document ID: 2018-1803 |
