Ratification of the tax treaty with Panama by the Israeli Government has been completed

Ratification of the tax treaty with Panama by the Israeli Government has been completed

On 12 June 2014, the ratification of the tax treaty with Panama by the Israeli Government has been completed. The tax treaty was signed on 8 November 2012 and will be effective on 1 January 2015.

The treaty is based on the OECD model and provides, inter alia, for the following withholding tax rates:

Dividends.

Distribution of dividends is subject to:

−15% withholding tax

−5% withholding tax upon distributions to pension scheme

−20% withholding tax if distributed by a Real Estate Investment Company and if the beneficial owner holds less than 10% of the capital of the Real Estate Investment Company

Interest and royalties.

Distribution of interest and royalties is subject to withholding tax rate of 15%

 

The tax treaty also includes a clause for the exchange of information between the tax authorities of both countries, based on the model treaty of the OECD.

 

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