Your Taxes: How to avoid triple tax on IP carve-outs when an Israeli start-up is acquired

Detailed summary

When a foreign buyer moves an Israeli company’s IP abroad after a share deal, the combined tax hit can top 80%, but ITA guidance offers ways around it. The Israel Tax Authority…

The Israel Tax Authority (ITA) has quietly issued some pronouncements that may have a profoundly positive effect on the Israeli economy, regardless of which government is in power. The pronouncements are relevant to “carve-outs” after an exit deal.We have already seen many massive exit deals, such as Google-Wiz ($32 billion), Palo Alto Networks-CyberArk ($25b.), and Intel-Classiq ($2.2b. reportedly).Why IP carve-outs can trigger triple taxation There are two main ways of structuring an M&A (merger & acquisition) deal: asset acquisition or share acquisition.

Opening of the article, excerpted from The Jerusalem Post. To read the rest, open the article on the publisher's site.