Representation Before Tax Authorities

1. Fiscal Representation and Local Agents for Foreign Residents / Foreign Companies

  • Authorized local representative: A foreign company or foreign resident conducting business activity in Israel is required to appoint a fiscal representative (power of attorney). The representative acts as a trusted liaison before tax authorities (Income Tax, VAT, National Insurance).
  • Responsibility and reporting: The representative handles the submission of periodic and annual reports, ensures compliance with local legal requirements, and receives official notices and documents from the authorities.

 

2. Obtaining Advance Tax Rulings (Pre-Ruling / Ruling)

  • Business certainty: Representation before tax authorities, including applying for an advance tax ruling (Pre-Ruling), prior to executing transactions or initiating activity.
  • Objective: Determining precise tax liability, securing agreed tax arrangements, and maximizing tax benefits to prevent future tax exposure and unnecessary disputes.

 

3. Cross-Border Representation and International Taxation (Specifically Israel–Germany).

  • Inter-agency coordination: In international activities, representation is conducted simultaneously before tax authorities in both countries (e.g., Israel and Germany).
  • Prevention of double taxation: Representation aims to implement Double Taxation Agreements (DTA), arrange withholding tax clearances, and ensure compliance with tax residency rules (such as the “center of vital interests” test).

 

4. Guidance Across All Stages of Investment and Business Activity

Representation before tax authorities is divided into three main stages:

  • Prior to investment / business setup: Advance tax planning, opening files, and registering with authorities.
  • During ongoing operations: Periodic reporting, submitting financial and annual returns, approving payments, and handling routine requirements.
  • Upon investment exit / asset realization: Managing tax liability upon sale (land appreciation tax / capital gains tax) and securing relief and exemptions according to law.