How does Israel's transfer pricing fit with BEPS and our global compliance program?

Israel is a member of the OECD Inclusive Framework on BEPS and has implemented BEPS Actions 5, 6, 13, and 15. Country-by-Country Reports are automatically exchanged between Rashut HaMisim and treaty partners for groups with global revenue above NIS 3.4 billion (approximately USD 900 million). BEPS Action 8-10 guidance on value creation, incorporated via Circular 16/2020, means that formal IP ownership carries less weight than where development functions and key decisions actually reside. For groups with Israeli R&D subsidiaries: if the Israeli entity employs the engineers and makes the innovation decisions, it may be entitled to more than a cost-plus return. For more detail, see Transfer Pricing in Israel: A Guide for Foreign Multinationals.