Under Section 131E of the Israeli Income Tax Ordinance, taxpayers are required to disclose in their annual tax return any “reportable position.” A reportable position is one where the taxpayer’s chosen interpretation of the law provides a tax advantage, while the Israeli Tax Authority has published a contrary position. The regime is intended to increase transparency and reduce aggressive tax planning by obligating taxpayers to notify the Authority when they rely on an interpretation that differs from its published guidance. Failure to disclose a reportable position may expose the taxpayer to penalties and extended assessment periods.

Similar disclosure provisions exist under Israel’s VAT legislation and customs laws.

In 2023, an amendment was introduced to the CRS Regulations through Regulation 10(j), granting the Director of the Israel Tax Authority the authority to notify a financial institution that an arrangement or transaction is intended to avoid CRS reporting and should therefore be disregarded. 
This mechanism differs from the general MDR regime, as it does not impose a reporting obligation, but it nonetheless serves as a tool to prevent aggressive tax planning in the CRS context.