SolvedDT10053 | Double Taxation Relief Manual: Israel: treaty summary
From HM Revenue & Customs · Double Taxation Relief Manual
The table summarises the provisions of the treaty in force as they relate to income beneficially owned by UK residents. The rate shown is the ‘treaty rate’ and does not reflect taxes chargeable under the domestic law of either state before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which the UK and Israel are permitted to tax income in the relevant categories under the treaty. Rates chargeable under the domestic law of either state may be higher or lower.
In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty itself should be consulted for the full details. The text of the treaty can be found on gov.uk.
| Subject | Comments | Article |
|---|---|---|
| Portfolio dividends | 15% (Note 1) | 6 |
| Dividends on direct investments | 5% (Note 1) | 6 |
| Conditions for lower rate on dividends on direct investments | The beneficial owner is a company which holds directly at least 10% of the capital in the company paying the dividends throughout a 365 day period that includes the day of payment of the dividends | 6 |
| Property income dividends | 15% | 6 |
| Interest on bank loans | 5% (Note 2) | 7 |
| Other interest | 10% (Note 2) | 7 |
| Royalties | 0% | 8 |
| Government Pensions | Taxable only in Israel unless the individual is ordinarily resident in the UK | 10 |
| Other pensions | Taxable only in the UK | 11 |
| Arbitration | No | N/A |
Note 1: Other than where the beneficial owner of the dividend is a pension scheme, in which case the rate is 0%.
Note 2: Other than interest paid in the following circumstances, in which case the rate is 0%
to the UK Government or political subdivision, a UK local authority or the central bank of the UK
by the Israeli Government or political subdivision, an Israeli local authority or the central bank of Israel
to a pension scheme which is a resident of the UK
to a resident of the UK on corporate bonds traded on a Stock Exchange in Israel which were issued by a company which is a resident of Israel, if all the conditions in Article 9(15d) of the Israeli Tax Ordinance, as it stood on 1 January 2017, are met