What is an advance tax ruling from the Israeli Tax Authority and how can a foreign investor request one?

The advance ruling process is administered by the Rulings Department (Machleket HaHachlatot) within the Israel Tax Authority. A ruling application must be submitted in Hebrew and must describe the proposed transaction in full, including the identity of all parties, the commercial rationale, the relevant facts, and the specific tax questions on which a ruling is sought. The ITA may request additional information or hold a meeting with the applicant and their advisors before issuing the ruling. Accepted rulings are published in anonymized form on the ITA website, providing useful precedent for advisers on similar transactions. The scope of a ruling is strictly limited to the facts as presented — any material deviation from the described transaction means the ruling no longer applies, and the taxpayer bears full exposure to the ITA's general assessment powers under the Income Tax Ordinance.

For foreign investors selling Israeli company shares or receiving dividends, an advance ruling is particularly valuable when the applicable double-taxation treaty exemption or reduced rate is not straightforward to apply. The ruling gives certainty before the transaction closes, avoiding the need to rely on the buyer withholding at the wrong rate and then filing a lengthy refund claim afterward. Applications involving a genuine question of law — where the answer is not already clear from published rulings or well-established ITA practice — are more likely to be accepted. The ITA may decline to rule on hypothetical or purely academic questions, or where the transaction has already been completed.

From the full guide: Capital Gains Tax in Israel for Non-Residents: Rates, Exemptions and Treaty Relief

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