If you are a U.S. or other non-Israeli shareholder selling shares in an Israeli or Israeli-related company, you may be asked to provide a withholding tax exemption to avoid unnecessary Israeli tax witthholdings at closing.
In most cases, non-residents are not subject to Israeli tax on capital gains from the sale of Israeli company shares. However, without an exemption issued by the Israeli Tax Authority, the paying agent is often required to withhold tax before releasing your proceeds. Therefore deal documents often allow a shareholder to elect to leave the consideration with a paying agent for up to 180 days to allow an exemption to be secured.
Our firm routinely assists U.S. investors – individuals, corporattions, trusts and partnerships and other non-residents in obtaining withholding exemptions quickly and efficiently. The process typically takes one to two weeks from the time we receive your documents. We handle all communication with the Israeli Tax Authority on your behalf.
1. Collecting Documents – We provide a simple checklist of the information and materials required.
2. Drafting the Application – We prepare the exemption request letter and share it with you for approval.
3. Issuance & Delivery – Once approved by the Tax Authority, we send the exemption certificate directly to the paying agent so your funds can be released.
In some cases, there may be special circumstances (for example, if the shareholder lived or worked in Israel, or other issues). In such cases, the process can be more complicated, but we will review your documents and let you know in advance if this applies to you.
Don’t risk delays or unnecessary withholding on your sale proceeds.
Contact us today to begin the exemption process and ensure a smooth transaction.
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