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Israel: Draft Pillar Two legislation

Draft legislation is open for public comment until October 26, 2025.

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October 6, 2025

The Israel Ministry of Finance on October 5, 2025, released draft legislation implementing aspects of the OECD's Pillar Two recommendations, including the qualified domestic minimum top-up tax (QDMTT) for large global multinational enterprises (MNEs).

Per the formal release statement (Hebrew), extensive work is also being performed to create a local tax incentive system that is aligned with the Pillar Two rules, which will be based primarily on examining the qualified refundable tax credit (QRTC) mechanism. The Ministry of Finance intends to publish the incentive outline by the time the legislative memorandum is submitted to the relevant legislative committees.

The draft legislation is open for public comment until October 26, 2025.

Read the draft legislation (Hebrew)


For more information or to provide input and comment to the draft legislation, contact a tax professional with the KPMG Global Transfer Pricing Services practice in Israel:

Tal Mizrahi | tmizrahi@kpmg.com

 

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