The Republic of Austria and the State of Israel concluded a new Convention for the avoidance of double taxation with respect of taxes on income and on capital.
The maximum withholidng tax rates stipulated by the treate are as stipulated in what follows below.
Article 10. Dividends
-0% of the gross amount of the dividends if the beneficial owner of the dividends is a company (other than a partnership) that holds directly at least 10% of the capital of the company paying the dividends
- 10% of the gross amount of the dividends in all other cases
Article 11. Interest income
1. 5% of the gross amount of the interest
2. 0%, i.e. interest arising in a Contracting State shall be exempt from tax in that State if it is paid:
a) to the Government of the other Contracting State, a political subdivision, a local authority or the Central Bank thereof
b) by the Government of the other Contracting State, a political subdivision, a local authority or the Central Bank thereof
c) to a pension fund or similar arrangement which is a resident of the other Contracting State
d) to a resident of the other Contracting State on corporate bonds traded on a Stock Exchange in the first-mentioned State and which were issued by a company which is a resident of that State
e) in respect of loan, debt-claim or credit that is owed to, or made provided, guaranteed or insured by, that State, political subdivision, local authority or export financing agency thereof
The new Convention shall have effect in respect of taxes for any fiscal year beginning on / after 1 January 2019.
Impact on investors: The new DTT between Austria and Israel will provide eligible beneficial owners with the possibility to avail of better tax rates.