Preliminary Tax Rulings

What is a preliminary tax ruling?

Amendment 147 to the Income Tax Ordinance, in effect from 1.1.2006, regulated in legislation the procedure for issuing tax rulings.
A "Tax Ruling" is a decision regarding the tax liability, the tax results or the consequences for the tax liability due to an action performed by the applicant for a tax ruling or due to the income, profit, expense or loss he had. The tax ruling will be given by the institution for tax rulings, before the activity is carried out and, in some cases, even after it is carried out. The tax laws in which tax rulings will be discussed are:

1. Income Tax Ordinance
2. Value Added Tax Law
3. Real Estate Taxation Law
4. Income Tax Law (Adjustments due to Inflation) – 1985
5. Encouragement of Capital Investments Law
6. Encouragement of Industry Law (Taxes) – 1968
7. Encouragement of Capital Investments in Agriculture Law – 1980
8. Any provision regarding tax in or pursuant to the law, which refers to one or more of the said legislations.

The administration may determine a tax ruling in an agreement or not, and also determine that no tax ruling will be given at all.

In case the administration has made a tax ruling, it cannot withdraw it unless all the information has not been provided to it or the circumstances have changed or false, incorrect or misleading information has been provided to it.

Those who submitted an application for a tax ruling may not withdraw their application except with the approval of the administration.