Appointing a fiscal Representative for Tax Purposes (FR)

According to the Israeli tax laws, foreign entity who keeps permanent business activity in Israel, and wishes to establish local tax files, must appoint FR.

A local trustee who will perform as the company’s representative in Israeli tax authorities. Our firm is appointed as FR for many multinational corporations that carry out local projects or hold different kinds of local permanent establishment for tax purposes in Israel.
Our firm holds extensive experience in this type of operations. We conduct special arrangements that allow the procedure to be carried out in a highly efficient way and meet all the tax authorities’ requirements for the corporation’s activities, which are derived from the VAT law and the tax regulations.

In addition to the above service, we offer:

  • Company registration and bookkeeping facilities
  • Tax services

The following is a concise description of the main requirements of the laws and regulations in Israel, which are relevant to this requirement.
Section 60 of the Value Added Tax Law 5735-1975 (hereinafter: the “VAT Law”) requires the appointment of a representative by non-Israeli residents who conduct business in Israel through foreign corporations. In accordance with Section 60, a foreign dealer is required to notify the VAT authorities, within 30 days from the date of commencement of his business activity in Israel, the name of his local representative. The representative may be an individual whose permanent place of residence is in Israel or a corporation registered in Israel – see Regulation 6 of the Value Added Tax Regulations Of 1976.

As stated, Section 60 regulates the matter of the registration of a foreign dealer operating in Israel and determines that a representative appointed as aforesaid will be considered, for the purposes of VAT law, as liable to the tax. 

It should be noted that in accordance to Section 132 of the Income Tax Ordinance [New Version] (hereinafter: “the Ordinance”), Section 68B states that a foreign resident who is required to appoint a representative pursuant to Section 60 of the VAT Law is required to appoint a representative for the purposes of the Ordinance. This representative shall be empowered to submit reports to the tax authorities, to receive funds for the foreign resident and to handle any matter required by law in Israel.

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