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Section 102 Annual Report – Postponed Filing Date for 2024 Report

Shachar Porat Efrat Kesler Kadmon

29 April 2025

We are pleased to update that after extensive discussions with the Israel Tax Authority, the Israel Tax Authority published yesterday (28 April 2025) a formal guidance letter confirming that the filing date for the 2024 annual report has been extended to October 1, 2025.

As you may recall and as previously reported, on January 1, 2025 the new Income Tax Rules (Tax Relief in Allocating Shares to Employees) (Amendment), 2024 (the “Rules“) came into effect and determined the process for filing reports to the Israel Tax Authority (the “ITA“) with respect to equity awards subject to Section 102 of the Israeli Income Tax Ordinance, including quarterly and annual reports. According to the Rules the annual report for 2024 was to be filed by April 30, 2025. However, pursuant to the new guidance the deadline for filing the 2024 annual report has been extended to October 1, 2025.

 

In addition, the guidance changed the scope of information required to be included in the annual report (Form 156), only for the 2024 report:

With respect to the trustee awards (which will be reported by the trustee): There is no requirement to include information regarding employees who have ceased to be Israeli residents (relocated employees), expirations or dividend distributions.

With respect to non-trustee awards (reported by the employer): There is no requirement to include information regarding employees who have ceased to be Israeli residents (relocated employees) or expirations.

Despite the above changes, it was clarified that both the trustee and the company must continue to maintain records of this information, as the ITA may request it during an audit.

Please note that the Rules and guidance letter apply to all equity plans, even those submitted for approval prior to January 1, 2025. Failure to file a complete and timely report may trigger the re-classification of the awards as a non-trustee awards.

For more information regarding the information that must be included in the reports, please refer to our previous client update sent regarding “New and Amended 102 Rules” for reading  click here.

 

Additionally, please note that quarterly reports for awards granted in the first quarter must be filed, using Form 146, within 120 days of the end of the quarter in which the awards were granted. That is, the online report for Q1 2025 must be filed to the ITA no later than July 29, 2025.

 

Please do not hessite to contact us with any additional question.

Sincerely,

Herzog Fox & Neeman

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