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February 7, 2023

Israelís Tax Authority releases new Form 1585 and updates Form 1385 following adoption of BEPS Action 13 principles

  • In September 2022, Israel enacted legislation and promulgated an amendment to the transfer pricing regulations, to align its transfer pricing rules with the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) Action 13 requirements (Local File, Master File, and Country-by-Country Reporting).

  • Further to such, the Israeli Tax Authority recently published a new notification form (1585) with respect to the due disclosure on Country-by-Country reporting in the group, and an amendment to form 1385 which inquires on the existence of a contemporaneous transfer pricing report upon filing of the tax return.

  • Multinational enterprises should carefully review the new forms which are relevant with respect to the 2022 tax return.

On 22 September 2022, an amendment to the Israeli transfer pricing (TP) regulations was published pursuant to the adoption of the BEPS Action 13 principles (See EY Global Tax Alert, Israel adopts BEPS Action 13 principles, dated 15 July 2022 and EY Global Tax Alert, Israel publishes new TP regulations following adoption of BEPS Action 13 principles in domestic legislation, dated 21 October 2022).

Pursuant to the above and taking into account the preparation and filing of the 2022 tax returns, the Israeli Tax Authority (ITA) recently published a new notification form (Form 1585) on the disclosure of information related to Country-by-country reporting (CbCR), including group revenues, identification of the Ultimate Parent Entity (UPE), and indication of the location of the CBCR submission, where applicable. The notification should be filed as part of the tax return for the same fiscal year (as opposed to the end of the fiscal year as in other jurisdictions). Israeli UPEs who plan of filling through a surrogate parent entity, should provide the notification by the end of the fiscal year directly to the ITA's portal.

The ITA has also published an updated Form 1385 for the disclosure of intercompany international transactions and their method of pricing and calculation.

While Form 1585 provides information on the UPE of the multinational enterprise (MNE) group and the whereabouts of the CbCR filing within such MNE Group, the amended Form 1385 requires the disclosure of whether the taxpayer has at its disposal an available TP report supporting the disclosed intercompany transaction, at the time of filing of the tax return, to meet all local TP documentation requirements, on an annual basis.

Attention should be given to the due and accurate filing of the relevant TP forms to the ITA, especially if such include new disclosures and information.


For additional information with respect to this Alert, please contact the following:

EY Israel, Tel Aviv

Ernst & Young LLP, Israel Tax Desk, New York


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