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Legislation Updates: TP Study Requirements, Master File and CbCR

7 April 2022

Following on from our recent update, on 4 April 2022, our firm participated in the next stage of discussions, on behalf of the Israeli Bar, with the Finance Committee of the Knesset (the Israeli Parliament) with respect to the amendment of the Israeli Tax Ordinance (the “Ordinance”), as well as to the Israeli transfer pricing regulations (the “Regulations”), specifically regarding the implementation of the Master File and Country by Country Report (CbCR) concepts and reporting obligations in Israel, and with regard to additional amendments to the currently required TP study.

The following key points were raised:

TP Documentation:

  • While current legislation dictates that TP documentation is required to be submitted within 60 days of request by the Israeli Tax Authorities (“ITA”), the ITA was looking to shorten the period to 21 days. Our firm, represented by our Head of Transfer Pricing, Adv. (Economist) Eyal Bar-Zvi, argued that it should not fall below 30 days, as customary also in other jurisdictions, and it is likely that the amendment will now be to 30 days. In this respect, the ITA expects that TP documentation will be in place prior to any request, as the TP study is the basis for completing 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, the current equivalent of Euro ~43 million;
  • The Master File template will follow the OECD Master File template, however with some adjustments for Israeli companies;
  • The Master File requirement will be effective as of FY 2022 and onwards.



  • 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.


Additional Comments:

  • There are expected to be minor, self-explanatory, updates to the Form 1385 indicating whether Master File and CbCR are relevant to the Israeli entity;
  • Current guidelines draft indicates that the Master File and Local File (TP documentation, i.e. the TP study) would be prepared together. Our firm argued that the Master File and Local File should be prepared separately, similar to most OECD member countries, in order for an Israeli company to be able to file the Master File it prepared elsewhere and vice versa.


A further Finance Committee discussion will take place towards the end of April or beginning of May where we will participate and provide further updates on the drafting which will be finally adopted by the Finance Committee, still subject to the approval of the Knesset.

We would like to take this opportunity to wish you a happy and healthy Passover. 


Meir Linzen | Chairman
Chairman of the firm and Head of Tax Department


Eyal Bar-Zvi | Partner
Head of Transfer Pricing
Tax Department


Yuval Navot | Partner 
Tax Department



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