Israel Introduces New Reform in High-Tech Taxation

Jerusalem, 3 November, 2025 (TPS-IL) — Israel’s Ministry of Finance, Tax Authority, and the Innovation Authority announced a comprehensive reform in high-tech taxation: a variety of steps to increase tax certainty, remove barriers to investment, encourage rapid return to Israel after relocation, and shorten bureaucratic procedures.

The reform includes a series of legislative steps and changes in the work procedures of the Tax Authority, which will remove barriers and provide incentives for the growth of Israeli high-tech companies in Israel, for the activity of multinational high-tech companies in Israel, for the acquisition of Israeli high-tech companies, for the rapid return of high-tech professionals to Israel from relocation, and for investment in companies throughout the entire life cycle of the industry: from the incorporation phase and initial capital raising rounds, through the growth phase and advanced fundraising rounds, and ending with the issuance or sale phase to a multinational company.

Among other things, the reform includes steps to regulate the activities of high-tech investment funds (Israeli and foreign) and investors (foreign and Israeli); Legislation to increase transparency and certainty in the worlds of income tax and VAT; removal of investment barriers for investment entities and companies in direct investment in high-tech companies; regulatory relief in the area of structural change to increase mergers and acquisitions activity, especially in the Israeli high-tech industry; steps to increase tax certainty for multinational companies, with an emphasis on the stages of acquisition of Israeli companies and management of R&D centers in Israel; a move to increase certainty in the taxation of marketing assets; and steps to increase the tax viability of a quick return to Israel from relocation.