New regulation No. 01/2023 (replacing the old No. 23/2001) for Israeli taxpayers who wish to use the mutual agreement procedure in accordance with Israel’s double tax treaties.
What does this mean?
A request to initiate a mutual agreement procedure must be filed with the ITA within 3 years from the date the taxpayer was first notified of the action that resulted in the assessment of tax not in accordance with the tax treaty;
If the ITA decides to initiate a mutual consent procedure, it may require the applicant to provide guarantees for its tax payments;
The ITA may agree to initiate a mutual agreement procedure also in the event of a dispute as to the applicability of anti-avoidance provisions (GAAR, in a tax treaty or in domestic law);
The ITA will not conciliate disputes over the calculation of foreign tax paid, as such credit is governed by domestic law.