Tax agreements and investment agreements
The bill introduces the definition of “investment agreement” into the Tax Ordinance, alongside the existing definition of “tax agreement.” Both types of agreements are to constitute grounds preventing the tax authority from assessing a tax obligation if the relevant agreement is in force, and within the scope of the agreement. This includes transfer pricing matters.
The new changes provide that the obligation to file form ORD-U would be eliminated for entities filing form TPR and not conducting transactions other than controlled transactions with counterparties from tax havens.
Sanctions in the Fiscal Penal Code
The bill calls for changes in the fiscal penal sanctions involving transfer pricing documentation and form TPR. A taxpayer would be exposed to a fine of up to 720 per diem units for failure to file transfer pricing documentation or form TPR. Late filing of transfer pricing documentation or form TPR could be punished by a fine of up to 240 per diem units.