TAX NEWS - 2010

Austria, Israel Sign Tax Treaty

Austria and Israel have initialed a revised tax treaty for the avoidance of double taxation between the two countries.

Under the new treaty terms, a 5% tax rate will be applicable on interest paid, and taxes previously due on royalties will be exempted, which will be beneficial to Israeli software development companies.

Tax on capital gains, other than on real estate, will be exempted, so that it is only payable in the taxpayers' country of residence. Where a company has a significant controlling interest, a tax exemption on dividends has been established and a 10% withholding tax is set on other dividends.

Other tax treaties recently signed by Israel, include treaties with Belgium, Britain, Germany, Denmark and Georgia.