Israeli companies retaining historical tax-exempt earnings under capital investment encouragement laws face strict dividend distribution and taxation regulations.

Key Provisions of the Trapped Profits Reform:

  • Reduced Corporate Tax Release Rates: Opportunities to release historical retained earnings at reduced corporate tax rates.
  • Mandatory Dividend Distribution Regulations: Mandatory tax rules on accumulated corporate cash reserves held by private holding companies.

Our CPA firm provides specialized corporate tax structuring to navigate trapped profit releases and dividend distributions safely.