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Tax / Employee Tax Benefits

Employee tax benefits, when properly planned and implemented, are a key tool for retaining quality senior employees and improving a company’s performance.

Our team provides comprehensive counsel on a wide range of issues relating to remuneration, incentives, and employee and executive retention. Clients include early-stage startups, private companies, public companies traded in Israel and abroad, employees, executives, employers, and boards of directors.

 

Our Tax Department works closely with our Commercial, Capital Markets, and Employment Departments to formulate creative solutions that ensure congruence between a company’s targets and its remuneration mechanisms. Our services include formulation and preparation of 102 stock options on a regular basis or as part of a merger or acquisition transaction. We also advise on restructuring, equity incentives, share-based plans, preliminary approvals from the Israel Tax Authority, phantom option agreements and grants, golden parachute arrangements, employee remuneration, and more.

 

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News and updates - Tax / Employee Tax Benefits:


July 17, 2019

Precedential Court Ruling on Options Plans for Employees

A precedential judgment was handed down on option plans for employees in respect of section 102 of the Income Tax Ordinance. The court ruled that when a tax assessor is notified of the allocation of options in accordance with section 102 and fails to respond within 90 days, the plan is approved and the assessor cannot later claim that this is not so, except in very exceptional cases.

December 19, 2018

ITA Sharpens Procedures in Wake of New Tax Circular

Adv. Micky Barnea was featured in a follow-up article in Globes about the Income Tax Authority's new circular that changes the tax policy relating to capital-based compensation dependent on performance. According to Barnea, "The new circular stipulates that options allocated under an approved plan, submitted lawfully to the Tax Authority, may be discovered on judgment day as not being entitled to reduced capital taxation."

December 18, 2018

High-Tech Earthquake: Tax on Exercising Options for Employees Will Increase Upon Exit or Issue

Adv. Daniel Lorber, the head of our firm's Equity Incentives practice field, was interviewed by Globes on the Israel Tax Authority's latest decision. Instead of a capital gains tax rate of 25% on options granted to employees for exercise in the event of an exit or issue, the proceeds from such exercise will now be considered labor income, and therefore the tax liability may rise to 50%.

Tax / Employee Tax Benefits

Employee tax benefits, when properly planned and implemented, are a key tool for retaining quality senior employees and improving a company’s performance.

Our team provides comprehensive counsel on a wide range of issues relating to remuneration, incentives, and employee and executive retention. Clients include early-stage startups, private companies, public companies traded in Israel and abroad, employees, executives, employers, and boards of directors.

 

Our Tax Department works closely with our Commercial, Capital Markets, and Employment Departments to formulate creative solutions that ensure congruence between a company’s targets and its remuneration mechanisms. Our services include formulation and preparation of 102 stock options on a regular basis or as part of a merger or acquisition transaction. We also advise on restructuring, equity incentives, share-based plans, preliminary approvals from the Israel Tax Authority, phantom option agreements and grants, golden parachute arrangements, employee remuneration, and more.

 

Back to Tax

News and updates - Tax:


July 17, 2019

Precedential Court Ruling on Options Plans for Employees

A precedential judgment was handed down on option plans for employees in respect of section 102 of the Income Tax Ordinance. The court ruled that when a tax assessor is notified of the allocation of options in accordance with section 102 and fails to respond within 90 days, the plan is approved and the assessor cannot later claim that this is not so, except in very exceptional cases.

December 19, 2018

ITA Sharpens Procedures in Wake of New Tax Circular

Adv. Micky Barnea was featured in a follow-up article in Globes about the Income Tax Authority's new circular that changes the tax policy relating to capital-based compensation dependent on performance. According to Barnea, "The new circular stipulates that options allocated under an approved plan, submitted lawfully to the Tax Authority, may be discovered on judgment day as not being entitled to reduced capital taxation."

December 18, 2018

High-Tech Earthquake: Tax on Exercising Options for Employees Will Increase Upon Exit or Issue

Adv. Daniel Lorber, the head of our firm's Equity Incentives practice field, was interviewed by Globes on the Israel Tax Authority's latest decision. Instead of a capital gains tax rate of 25% on options granted to employees for exercise in the event of an exit or issue, the proceeds from such exercise will now be considered labor income, and therefore the tax liability may rise to 50%.

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