Media Centre

Finance Committee Approves Master File and CbCR Regulation Changes and other TP Requirements

15 June 2022

Following on from our updates in March and April of this year, on June 14th, 2022 the Finance Committee of the Knesset (the Israeli Parliament) has approved the changes to include Master File and Country by Country Report (CbCR) concepts, as well as updated other reporting obligations in Israel. These changes are still subject to the approval (2nd and 3rd reading) of the law in the Knesset. This step is likely to prevent the inclusion of Israel in the OECD’s “black list” of uncooperative tax havens, as was threatened by the OECD.

As previously published, our firm, represented by our Head of Transfer Pricing, Adv. (Economist) Eyal Bar-Zvi, participated on behalf of the Israeli Bar in the recent discussions held by the Finance Committee with respect to the amendment of the Israeli Tax Ordinance (the “Ordinance”), as well as to the Israeli transfer pricing regulations (the “Regulations”). The following key points were approved by the Committee:

TP Documentation:

  • TP documentation will be required to be submitted within 30 days of request by the Israeli Tax Authorities (“ITA”), as customary in other jurisdictions. The ITA asked for a shorter timeframe, however we successfully argued in front of the committee that it should not fall below 30 days. In this respect, the ITA expects that TP documentation will be in place and updated periodically, as the TP study is the basis for annually filing the Form 1385;
  • In addition to the current requirements in the TP documentation, the following details were raised as required in each TP study:
    • The ITA demanded that the name of the senior executives in the group appear in the study, we objected to the issue and it was rejected by the Finance Committee. A table depicting the senior level job descriptions will remain within the framework of the holdings table and group / company structure, without the names. However, the companies will also be required to detail where the senior officials are physically located (which country);
    • A list of the entities’ competitors will be required;
    • A description of the main service agreements should be included.

Master File:

Master File Threshold: The draft Regulations required a zero threshold on the Master File filing requirements. As mentioned, the Israeli Bar disagreed with the Israeli CPA association and the ITA regarding the revenue threshold. The Finance Committee settled that the threshold will be NIS 150 million, per our suggestion, the current equivalent of Euro ~43 million. Note that this requirement applies to an Israeli subsidiary even if the parent company’s jurisdiction does not require a Master File;

• The Master File template will follow the OECD Master File template, however with some adjustments for Israeli companies, which widen the reporting scope.


CbCR Threshold: As mentioned, the CbCR threshold will be NIS 3.4 billion. We requested that the ITA will not be able to request the CbCR for entities below that threshold, and relevant amendments will be made to the draft amendments to the Ordinance and Regulations.

The foregoing is a general description only. Please contact us for any further inquiries.

Meir Linzen | Chairman
Head of Tax Department
Yuval Navot | Partner 
Tax Department
Eyal Bar-Zvi | Partner
Tax Department, Head of Transfer Pricing
Guy Katz | Partner
Tax Department


Search by +