We aid companies and individuals in the field of tax planning. We provide professional tax advice regarding the correct manner of incorporation, as well as the business activities that already exist. Our firm accompanies and advises firms at various stages and provides consultation during transactions, exercise of options, offsetting losses, and more, while also seeing the full picture of the accounting, economic, and legal aspects and utilizing the experience of our firm's representatives in the tax authority.
What is Tax Planning?
Tax planning is the use of legal tools to reduce tax liability. It involves the advanced calculation of accounting and business actions and their tax implications. Through tax planning, the taxpayer can choose a legal method that results in paying less tax. Therefore, effective tax planning is essential for a company’s survival and prosperity.
Tax planning is done by an expert tax planning accountant who utilizes grants, laws, and loopholes in complicated tax laws to reduce the tax burden, while still complying with the law. The importance of tax planning was previously stated by Supreme Court Justice Shamgar in the “Hazon” verdict: “The right and even the duty of tax law experts is to plan legal transactions so that there will be no tax petitions.”
Mergers, Splits and Acquisitions
Our firm provides consulting and support services for all types of mergers and structural changes. We can help with statutory mergers in which the company absorbs all the activities and assets of the transferring company, exchange of shares, sale of rights by an existing shareholder, and more.
Our firm assists in complex tax planning, determining the merger strategy both from the economic and commercial aspects and from the taxation aspect and accompanies the merger process, identifies risks, maximizes the tax advantage, and examines the ideal structure.
The staff of our Tax Planning Office have experience in handling mergers, both in senior positions in the tax authority and in the private sector.
Read more about merging companies and tax planning here.
Tax Planning - Encouragement of Capital Investments Law
The Capital Investment Encouragement Act is intended to encourage exports, employment, and develop the country’s production capacity. Companies that meet the conditions of the law will receive very significant tax benefits, including a reduction in the tax rate applicable to them, sometimes even to 80% less than the regular tax.
Our firm has experience in determining tax opinions in this area as well as in reaching tax arrangements with the Tax Authority even in the most exceptional and innovative cases.
Read more about the Capital Investment Encouragement Law and Tax Planning here.
Tax Optimization and Transaction Support
The firm provides tax advice concerning investments and the classification of investments in an optimal way for the client. We classify income in a way that can minimize the tax by examining the possibility of applying various tax incentives and more.
The range of tax planning options in transactions is broader when the planning is done at an earlier stage.
In some cases, we may opt to establish the business as a “house company”, “family company”, or a more complex tax structure that includes different partnerships and companies.
Tax Planning - Offsetting Losses
We provide advice to companies and individuals regarding losses that can be offset in the tax year and subsequent years. In addition, our firm examines the type of income that can be offset, assists in the full utilization of offsetting options, softens losses, offsetting when merging companies or bringing in a partner, etc. Our firm provides opinions on the matter and submits tax ruling requests to the relevant department within the Israel Tax Authority.
Tax Classification
Classification of income (whether it is ordinary or capital income) and classification of tax accordingly, while reducing tax liability and complying with the requirements of the law.
Sometimes the same transaction can be classified as capital gain (to which beneficiary tax rates will usually apply) as opposed to business activity (to which ordinary tax rates will apply). Capital gains taxation is a complicated issue that has changed quite a bit over the years.
In some cases, we would rather classify the income as business income (when there are losses, the shareholder has a disability and more).
Advice on Taxation of Payment Given in a Judgment or Arbitration
Payments or compensations received as a part of a lawsuit or arbitration are subject to taxation. Our firm examines whether it is possible, under the law, to classify the payment in a way that will not be considered taxable income and determines the correct method to classify the income to reduce the tax burden. In some cases, the advice includes a legal opinion on the matter which protects from criminal exposure.
