How does Israel's Mutual Agreement Procedure work for transfer pricing disputes?

If a transfer pricing adjustment creates economic double taxation, the taxpayer can file a MAP request under the relevant treaty with the Competent Authority at Rashut HaMisim's International Tax Division. Both competent authorities attempt to reach agreement within 2 years, though complex cases take longer. Israeli domestic collection proceedings are not automatically suspended during MAP, so it may be necessary to pay or secure the disputed tax while MAP is pending. Israel has committed to mandatory binding arbitration for unresolved MAP cases under the Multilateral Instrument (MLI). For more detail, see Transfer Pricing in Israel: A Guide for Foreign Multinationals.