-
Why Grant Thornton
Whether you’re growing in one market or many, looking to operate more effectively, managing risk and regulation, or realising stakeholder value, our firms can help.
-
Culture and experience
Grant Thornton’s culture is one of our most valuable assets and has steered us in the right direction for more than 100 years.
-
Global scale and capability
Beyond global scale, we embrace what makes each market unique, local understanding on a global scale.
-
Join our network
In a world that wants more options for high quality services, we differentiate in the market to grow sustainably in today’s rapidly changing environment.
-
Leadership governance and quality
Grant Thornton International Ltd acts as the coordinating entity for member firms in the network with a focus on areas such as strategy, risk, quality monitoring and brand.
-
Africa
24 member firms supporting your business.
-
Americas
31 member firms, covering 44 markets and over 20,000 people.
-
Asia-Pacific
19 member firms with nearly 25,000 people to support you.
-
Europe
53 member firms supporting your business.
-
Middle East
8 member firms supporting your business.
-
Business consulting services
Our business consulting services can help you improve your operational performance and productivity, adding value throughout your growth life cycle.
-
Business process solutions
We can help you identify, understand and manage potential risks to safeguard your business and comply with regulatory requirements.
-
Business risk services
The relationship between a company and its auditor has changed. Organisations must understand and manage risk and seek an appropriate balance between risk and opportunities.
-
Cybersecurity
As organisations become increasingly dependent on digital technology, the opportunities for cyber criminals continue to grow.
-
Forensic services
At Grant Thornton, we have a wealth of knowledge in forensic services and can support you with issues such as dispute resolution, fraud and insurance claims.
-
Mergers and acquisitions
We work with entrepreneurial businesses in the mid-market to help them assess the true commercial potential of their planned acquisition and understand how the purchase might serve their longer-term strategic goals.
-
Recovery and reorganisation
Workable solutions to maximise your value and deliver sustainable recovery.
-
Transactional advisory services
We can support you throughout the transaction process – helping achieve the best possible outcome at the point of the transaction and in the longer term.
-
Valuations
We provide a wide range of services to recovery and reorganisation professionals, companies and their stakeholders.
-
IFRS
At Grant Thornton, our IFRS advisers can help you navigate the complexity of financial reporting from IFRS 1 to IFRS 17 and IAS 1 to IAS 41.
-
Audit quality monitoring
Having a robust process of quality control is one of the most effective ways to guarantee we deliver high-quality services to our clients.
-
Global audit technology
Our global assurance technology platform provides the ability to conduct client acceptance, consultations and all assurance and other attestation engagements.
-
Corporate and business tax
Our trusted teams can prepare corporate tax files and ruling requests, support you with deferrals, accounting procedures and legitimate tax benefits.
-
Direct international tax
Our teams have in-depth knowledge of the relationship between domestic and international tax laws.
-
Global mobility services
Through our global organisation of member firms, we support both companies and individuals, providing insightful solutions to minimise the tax burden for both parties.
-
Indirect international tax
Using our finely tuned local knowledge, teams from our global organisation of member firms help you understand and comply with often complex and time-consuming regulations.
-
Transfer pricing
The laws surrounding transfer pricing are becoming ever more complex, as tax affairs of multinational companies are facing scrutiny from media, regulators and the public
-
Africa tax desk
A differentiating solution adapted to the context of your investments in Africa.
-
Banking Holding banking to account: the real diversity and inclusion pictureWe explore how the banking sector can continue to attract, retain and nurture women to build a more diverse and inclusive future.
-
Sustainability From voluntary to mandatory ESG: How banks can future-proof their operationsAs we move from voluntary ESG initiatives to mandatory legislation, we explore what the banking sector needs to prioritise.
-
IFRS IFRS 9 - Audit of Expected Credit LossesGPPC releases The Auditor’s response to the risks of material misstatement posed by estimates of expected credit losses under IFRS 9
-
growthiQ Steering your company to long-term successHistory has something important to tell us about the difficulties of steering a business to long-term success – through seismic shifts in technology, consumer demands and product development. With that in mind it’s unsurprising that over half the world’s largest companies in the early 1900s had shut their doors by the late 1990s. Some, however, have endured.
-
International Financial Reporting Standards Implementation of IFRS 17 ‘Insurance Contracts’The auditor’s response to the risks of material misstatement arising from estimates made in applying IFRS 17 ‘Insurance Contracts’
-
IFRS Get ready for IFRS 17After twenty years of development the IASB has published IFRS 17 ‘Insurance Contracts’, find out more.
-
Global business pulse - industry analysis Mid-market recovery spreads to more industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
-
Global business pulse - industry analysis A very uneven recovery across industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
-
Global business pulse - Sector analysis Clear patterns of damage from COVID-19 across the industriesThe index results for 12 key sectors of the mid-market reveal just how much or little the various parts of the economy were impacted by COVID-19.
-
Not for profit Mission: possible – putting impact at the heart of charityGlobal charitable continues to decline and charity leaders are increasingly looking at their own unique impact journey.
-
Access to finance Raise finance to invest in changePrepare your business to raise finance to invest in change.
-
Private equity firms Private equity in the mid-market: reshaping strategies for 2021When the global COVID-19 pandemic stormed across the globe in early 2020, the private equity sector was hit hard but deals are coming back to the market.
-
Mid-market businesses Getting ready for private equity investmentOur specialists explore how private equity firms are now working with their portfolios and how the mid-market can benefit from investment.
-
Mid-market businesses Myth-busting private equityNervous about partnering with Private Equity? We explore some of the common myths we come across when speaking to mid-market businesses about PE investment.
-
Public sector Helping build the government of tomorrow, todayLearn about the Grant Thornton US public sector team.
-
Global business pulse - industry analysis Mid-market recovery spreads to more industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
-
Global business pulse - industry analysis A very uneven recovery across industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
-
Global business pulse - Sector analysis Clear patterns of damage from COVID-19 across the industriesThe index results for 12 key sectors of the mid-market reveal just how much or little the various parts of the economy were impacted by COVID-19.
-
Industries European Real Estate PodcastJessica Patel, Tax Partner at Grant Thornton UK speaks with tax partners and directors across the network to share their insights on the real estate market and some of the challenges.
-
Industries European Real Estate PodcastJessica Patel, Tax Partner at Grant Thornton UK speaks with tax partners and directors across the network to share their insights on the real estate market and some of the challenges.
-
Global business pulse - industry analysis Mid-market recovery spreads to more industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
-
Global business pulse - industry analysis A very uneven recovery across industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
-
-
Global business pulse - industry analysis Mid-market recovery spreads to more industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
-
Global business pulse - industry analysis A very uneven recovery across industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
-
Retail How retail is positioning for successCOVID-19 provided some hard lessons for the retail industry. It is time to turn those into sustainable and well executed growth strategies in 2021.
-
Telecoms Can tech and telecom leverage economic headwindsAs most businesses brace for an economic downturn, tech and telecom could see new prospects. But, to turn the headwinds to your advantage, you need to find your unique opportunities and risks.
-
Technology Mid-market tech companies lead the way on diversity and inclusionWe explore how the mid-market tech sector can continue to build and nurture a culture that’s increasingly more diverse and inclusive for women.
-
Tax Resetting global tax rules after the pandemicBusinesses are seeing rising challenges, and finance heads are dealing with a range of new measures. To say the next 12 months are critical for businesses is an understatement.
-
TECHNOLOGY International tax reform: the potential impact on the technology industryIn this article, we’ve summarised key elements of the global tax reform proposals, their potential impact on technology industry and advice from our digital tax specialists on what technology companies can do to prepare.
-
Telecoms Can tech and telecom leverage economic headwindsAs most businesses brace for an economic downturn, tech and telecom could see new prospects. But, to turn the headwinds to your advantage, you need to find your unique opportunities and risks.
-
TMT TMT industry: Fully charged or on standby?Our research revealed five key trends that resonated with Technology, Media and Telecoms (TMT) industry leaders around the world. We asked a panel of our experts from UK, US, India Ireland and Germany, to give us their reaction to the findings.
-
Cybersecurity One size fits nothingTechnology companies must adopt a new approach to digital risk: those that successfully develop a reputation for digital trust by demonstrating an unwavering commitment to cyber security and data privacy will be able to carve out a competitive advantage.
-
Technology, media & telecommunications Why it’s time for a 5G reality checkFigures suggest the mobile sector is maturing. While data usage continues to soar, mobile revenues are expected to flatten out over the next few years.
-
International business Mid-market businesses lifted by rising tide of optimismOptimism among global mid-market business leaders rose to 67% in the first half of this year and they are markedly more optimistic about their prospects with global optimism having increased by 8%.
-
Global business pulse - industry analysis Mid-market recovery spreads to more industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
-
Hotels COVID-19: Checking in with the hotel industry one year onCOVID-19 provided some hard lessons for the hotel sector. It is time to turn those into sustainable and well executed growth strategies.
-
Global business pulse - industry analysis A very uneven recovery across industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
- By topic
-
Women in Business 2024
2024 marks the 20th year of monitoring and measuring the proportion of women occupying senior management roles around the world.
-
COP28: Mid-market firms should seize the opportunity from adaption and innovation
COP28 was the first time there has been a global stocktake on progress against the Paris Agreement.
-
Scanning the horizon: Mid-market sets sights on global trade growth
The latest International Business Report (IBR) data shows that mid-market businesses have high expectations for global trade.
-
Mid-market sees business optimism reach record high
Grant Thornton's latest International Business Report (IBR) sees optimism among mid-market business leaders reach a record high with 74% optimistic about the outlook for their economy over the next 12 months.
-
Women in tech: A pathway to gender balance in top tech roles
Grant Thornton’s 2024 Women in Business data suggests we are far from achieving parity within the mid-market technology sector.
-
Women in leadership: a pathway to better performance
What makes the benefits of gender parity compelling is the impact it can have on commercial performance.
-
Women in Business 2024
2024 marks the 20th year of monitoring and measuring the proportion of women occupying senior management roles around the world.
-
Women in business: Regional picture
We saw an increase in the percentage of senior management roles held by women, on a global level, but there are some significant regional and country variations.
-
Pathways to Parity: Leading the way
To push towards parity of senior management roles held by women, who leads within an organisation is vital.
-
Generating real change with a long-term focus
The most successful strategy to achieve parity of women in senior management is one which stands alone, independent of an ESG strategy.
-
People at the heart of great business
Businesses have started to put guidelines and incentives in place, focused on driving employees back to the office.
-
Focusing and developing a solid strategy around diversity, equity and inclusion
Grant Thornton Greece is pioneering a growing set of diversity, equity and inclusion (DE&I) initiatives that centre around three strategic pillars.
-
Ten considerations for preparing TCFD climate-related financial disclosures
Insights for organisations preparing to implement the International Sustainability Standards Board (ISSB)’s Standards.
-
COP28
COP28 was the first time there has been a global stocktake on progress against the Paris Agreement.
-
Transition Plan Taskforce publishes its final disclosure framework
As organisations in the private sector make commitments and plans to reach net zero, there's a growing need for stakeholders to be able to assess the credibility of their transition plans.
-
Promoting ESG excellence through tax
ESG considerations have never been more important for an organisation’s long-term success, but how can tax be used to add value to an ESG agenda?
-
International business: Mid-market growth and expansion
The mid-market looks to international business opportunities for growth.
-
Top five constraints to international business in the mid-market
Top five major constraints that are testing the mid-market’s ability to grow their businesses internationally.
-
Brand and international marketing – breaking global barriers
Brand has been identified as a key driver of mid-market success when looking to grow and develop international business.
-
The key to international business: Investing in people
How can recruitment and retention help grow international business?
-
Building resilience in international business
Evolving supply chains and trade patterns amid ongoing global uncertainty.
-
IFRS Alerts
IFRS Alerts covering the latest changes published by the International Accounting Standards Board (IASB).
-
Example Financial Statements
General guidance for preparers of financial statements that supports the commitment to high quality, consistent application of IFRS.
-
Insights into IFRS 2
Insights into IFRS 2 summarises the key areas of the Standard, highlighting aspects that are more difficult to interpret and revisiting the most relevant features that could impact your business.
-
IFRS 3
Mergers and acquisitions are becoming more common as entities aim to achieve their growth objectives. IFRS 3 ‘Business Combinations’ contains the requirements for these transactions.
-
IFRS 8
Our ‘Insights into IFRS 8’ series considers some key implementation issues and includes interpretational guidance in certain problematic areas.
-
IFRS 16
Are you ready for IFRS 16? This series of insights will help you prepare.
-
IAS 36
Insights into IAS 36 provides assistance for preparers of financial statements and help where confusion has been seen in practice.
-
IFRS 17
Explaining the key features of the Standard and providing insights into its application and impact.
-
Pillar 2
Key updates and support for the global implementation of Pillar 2.
-
Global expatriate tax guide
Growing businesses that send their greatest assets – their people – overseas to work can face certain tax burdens, our global guide highlights the common tax rates and issues.
-
International indirect tax guide
Navigating the global VAT, GST and sales tax landscape.
-
Global transfer pricing guide
Helping you easily find everything you need to know about the rules and regulations regarding transfer pricing and Country by Country reporting for every country you do business with.
Please click on each section to expand further:
The legislation within Israel in respect of transfer pricing is disclosed within Section 85A of the Israel Tax Ordinance (New Version),1961 and the Income Tax Regulations (Determining Market Conditions) – 2006 (The Regulations) with an effective date commencing 1 November 2006.
The aforementioned legislation states that any international transaction in which there is a special relationship between the parties, in respect of the transaction, and for which a price was settled on for property, a right, a service or credit is required to be set in accordance with the arm's length principle.
The provisions within Section 85A of the Israel Tax Ordinance and the provisions thereunder include a description of the transfer pricing documentation required.
The transfer pricing regulations require taxpayers to report and submit relevant transfer pricing documentation for all cross-border transactions between related parties within 60 days of a request by the Israeli Tax Authorities (ITA). Occasionally, this can be reduced to 30 days in special circumstances.
The taxpayer is required to include within their annual corporate tax return a special signed form (1385 Form and if required Form 1485) which details the transactions and relevant sums in respect to the related parties including a signed declaration that the transactions are conducted at arm's length.
Israel is a full member of the OECD.
According to section 6 of the Income Tax Regulations (Determination of Market Conditions), 2006: 'A market conditions study that was conducted before the publication of these regulations will be regarded as a market conditions study that was conducted in accordance with these regulations, this for two years from the date of their publication, provided that it was conducted in accordance with the accepted guidelines published by the OECD or its member countries'. These regulations were published on November 2006. There is no other reference in the domestic legislation to the OECD Guidelines other than circulars that have been issued by the Israel Tax Authorities where reference is made to OECD Guidelines. However, the OECD Guidelines can be regarded as one of the interpretation aids.
However, as of yet, the requirements detailed within BEPS Action 13 have not yet been incorporated within the domestic Israeli legislation, although this is expected to be implemented within the near future.
To determine whether an international transaction is at arm's length, the Israeli transfer pricing regulations require the taxpayer to apply one of the following methods, in order of hierarchy:
- Comparable Uncontrolled Price (CUP)
- Comparable Profitability
- Cost Plus or Resale Price
- Comparable Profits Method/Transactional Net Margin Method
- Other Methods.
In respect of the Comparable Profit Method/Transactional Net Margin Method, the Israeli transfer pricing regulations stipulate the use of several 'Profit Level Indicators' depending on the exact nature of the transaction, eg whether distribution or service based.
In respect of the above, other methods can be applied if they can be considered reliable and appropriate.
An international transaction will be regarded as a transaction at market conditions if as a result of its comparison in accordance with the comparison methods for similar transactions, the result obtained does not exceed the inter-quarterly range obtained in the comparison with similar transactions. Should however the comparison method be a Comparable Pricing method (such as CUP) and adjustments were not made for cancelling out the effect of the difference on the comparability criteria, the transaction will be regarded as a transaction at market conditions if the price does not exceed the value range in similar transactions.
Should it not be possible to regard an international transaction as a transaction at market conditions as said above, the transaction price will be reported according to the value located in the 50th centile in the value range.
All taxpayers are required to comply with the Israeli Transfer Pricing Regulations. There are no exemptions.
All taxpayers are required to maintain documentation and disclose related party transactions in the 1385 Form (and if required 1485 Form) which is attached to the corporate tax return.
The Legislation requires the taxpayer to prepare detailed transfer pricing documentation including a market conditions study.
The 1385 Form (and 1485 Form if required) always needs to be submitted together with the corporate tax return and should be based on an economically valid transfer pricing documentation and analysis.
The Israeli Tax Authorities (ITA) can request the documentation within 60 days. Occasionally, this can be reduced to 30 days in special circumstances.
In October 2020, the Israeli Tax Authorities publicized its proposal to amend Section 85A of the Income Tax Ordinance and its Regulations. The proposed legislation follows OECD’s Base Erosion and Profit Shifting (BEPS) Action 13. A Local File, Master File, and a Country-by-Country (CbC) report, will be required.
Grant Thornton Israel anticipates that the expected date of implementation will be during 2022 relevant for FY 2021 tax reporting.
It should be noted that the Master and Local file structure is considered best practice in Israel.
- Losses being generated in 'low risk' entities
- Start-up IP mismatches
- Business restructurings and transfer of functions, assets, and risks triggering taxable events
- R&D and traditional cost-plus centers being challenged and ITA favoring profit split method in certain cases
- Transfer of intangible assets between entities (publicized court cases)
- Unusual intercompany transactions or complicated corporate/legal structures
- Entities amending their transfer pricing model
- Financial Transactions with low credit scores
- International transactions between entities where one of the entities are located in 'Offshore' jurisdictions.
Failure to submit transfer pricing documentation when requested by the ITA or insufficient documentation or false declarations on the 1385 Form (or 1485 Form if required) may result in civil and criminal implications.
In respect to transfer pricing adjustments, general tax related penalties (under section 191 of the Israel Tax Ordinance) include a penalty of 15% (which can in some circumstances be increased to 30%) of the deficit when the taxable income under audit is higher by 50% or more than the reported taxable income. However, the particular tax inspector has the discretion of cancelling a penalty when reaching a settlement.
It should be noted that penalties are considered in addition to the taxpayer's tax debt and therefore are linked to the index and carry 4% interest.
The Israel Tax Authorities will expect to see that a search for potential internal comparable companies (under the CUP method) has taken place before defaulting to an external database search for potential comparable companies.
Although not stated in the legislation, The Israel Tax Authorities would prefer use of local comparable companies where appropriate and reliable.
Taxpayers must demonstrate a detailed economic analysis and explanation of search criteria and methods and conclusions applied.
An interquartile range is acceptable and common practice.
The ITA has issued guidance (in the form of circulars - issued during 2018) in respect to certain safe harbor provisions. In respect to the provision of limited risk distribution services - a safe harbor of around 3%-4% based on Operating Margin. In respect to the provision of marketing services the safe harbor is between 10%-12% based on net cost plus. Also, low-level services (following the OECD Guideline definitions) are set with a net cost plus of 5%. This has been confirmed in various circulars issued by the ITA. Such safe-harbor provisions allow for simplified approach for low value-adding intra-group services.
The following mechanisms are available in Israel to taxpayers to prevent and/or resolve transfer pricing disputes including advance pricing agreements and rulings:
-
- Rulings
- Advance Pricing Agreements (APA's) including;
- Unilateral APA's
- Bilateral APA's
- Multilateral APA's
- Mutual Agreement Procedures (MAP).
It should be noted that Israel has an extensive treaty network, and the Mutual Agreement Procedure (MAP) will often be available when double tax occurs.
All companies that engage in international transactions with related parties need to comply with transfer pricing legislation.
A 'One Time' transaction legislation may provide an exemption from some of the transfer pricing documentation obligations. In respect of this, there may be no need to perform and do a comparability analysis.
However, it should be noted that such exemption is extremely rare and will usually require some form of prior approval from Israel Tax Authorities.
The reference in respect of this is detailed within Section 4 of the Income Tax Regulations (Determination of Market Conditions), 5767, 2006.
The ITA recently announced its intention to tighten its standpoint with tax audits in relation to transfer pricing (TP) policies with regard to research and development (R&D) centers in Israel.
According to the ITA (stated in unofficial public discussion), it should be examined carefully, within the functional, asset, and risk analysis whether the Israeli R&D centre indeed functions as a service provider or as a partial/full owner of an intangible asset being developed.
International groups with relevant R&D centers in Israel should revew their TP policies in light of these developments.
Israel was part of OECD's Digital Taxation Deal signed October 2021, which is a major reform of the international tax system regarding the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy.
The ITA has a dedicated and sophisticated transfer pricing department handling all TP issues including raising tax assessments, issuing circulars and guidance, updating legislation, reviewing/approving rulings and advance pricing arrangements and MAP procedures.
The Israeli Tax Authorities can be described to take an aggressive approach with regards compliance with transfer pricing legislation and respective intercompany transactions. TP tax audits are common for all taxpayers with international transactions.
In particular, business restructuring and intellectual property (IP) migration are under scrutiny from the Israeli Tax Authority.
In addition, traditional cost-plus structure are under scrutiny and the Israeli Tax Authorities are shifting to favor under certain conditions a revenue or profit split method.
The ITA takes the position that stock options must be included in the cost base. It should be noted that in many circumstances, stock options are not deductible expenses for tax purposes. This is usually scrutinised in detail by the ITA.
Israel Tax Authorities focuses on improving the standards of transfer pricing documentation and economic analyses via reviews of taxpayer and agent 'behavior'. It will expect local reviews of functions, assets and risks, accurate characterization, and high-quality TP documentation. ITA has during the last few years held round table talks to help define new legislation and policies and invited leading transfer pricing consultants (including Grant Thornton Israel) promoting the benefits of 'cooperative compliance'.
No specific Covid-19 policies have been introduced in respect to transfer pricing, however, the pandemic has given taxpayers the opportunity the review their transfer pricing practice.
During the Covid-19 pandemic, the ITA in FY 2020 released a circular in respect of the 'burden of proof' with an emphasis on client to prepare sufficient TP documentation and empowering the Tax Assessing Officer to undertake an assessment based on his/her best adjustment', and 'experience' without the need to prepare/present an alternative economic study.
It should be noted that although the circular represents the ITA position and practices during course of tax audit, it is not legally binding.
For further information on transfer pricing in Israel please contact:
Shay Moyal |