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New ITA Ruling: Tax Benefits for Online Gaming Companies

27 January 2020

Dear Clients and Colleagues,

In January 2020, the Israel Tax Authority (“ITA”) published Ruling No. 0304/20 (the “Ruling”), affirming the eligibility of gaming companies for preferred technological enterprise status under the Law for Encouragement of Capital Investment (the “Law”). This Client Circular briefly reviews the benefits under the Law and the conditions for eligibility, as well as a number of additional provisions and points of note.

Benefits under the Law
• Corporate tax rate of 12% (7.5% for companies located in “Development Zone A”)
• Taxation of dividends:
⇒ Israeli shareholders – 20% for individual shareholders and 0% for corporate shareholders;
⇒ Non-Israeli shareholders – 20%, or lower rate pursuant to a tax treaty. 4% rate for non- Israeli corporate shareholders if they hold 90% or more of the company.

Eligibility for Benefits
The Ruling states that an Israeli company in the field of online gambling (casino and sports betting) may be entitled to the above benefits, subject to compliance with the Law.


Herzog has extensive experience in dealing with rulings including eligibility for preferred technological enterprise benefits under the Law and reorganizations of multinational groups involved therein. We recommend contacting us to discuss the feasibility of applying for a pre-ruling to apply the provisions of the Law in order to optimally plan future conduct.

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