“One and one equals three”

In many instances during the life of the business, a change is required in the structure of the business for a variety of purposes – to reduce expenses, activity as a single legal entity, the advantage of size, splitting operating segments or transferring assets from an individual to a company, or from one company to another for administrative and legal reasons.

In certain instances and subject to conditions and limitations, the Income Tax Ordinance allows a structural change to be made without any tax liability.

The Income Tax Ordinance sets out conditions under which a structural change can be made on a ‘green track’, on a track of notification only, or through an initiated application (rolling) to the professional department of the Income Tax authority in order to obtain positive approval for implementing the change within the context of law.