Article 14 - Capital Gains - Israel

Article 14 Capital gains 1. Gains derived by a resident of a contracting State from the alienation of immovable property referred to in Article 6 and situated in the other contracting State may also be taxed in that other State. 2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other contracting State or of movable property pertaining to a fixed base available to a resident of a contracting State in the other contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may also be taxed in that other State. 3. Gains from the alienation of ships or aircraft operated in international traffic, or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in the contracting State or which the enterprise is a resident. 1 [4. Gains derived by a resident of a Contracting State from the alienation of: a) shares, deriving more than 50 per cent of their value directly or indirectly from immovable property situated in the other State (at the time of the alienation or at any time during the twelve preceding months); or b) an interest in a partnership, trust or other entity, deriving more than 50 per cent of its value directly or indirectly from immovable property situated in that other State (at the time of the alienation or at any time during the twelve preceding months); may be taxed in that other State.] 5. Gains derived by a resident of a contracting State from the sale, exchange or other disposition, directly or indirectly, or shares other than those mentioned in paragraph 4, or similar rights in a company which is a resident of the other contracting State may also be taxed in that other State. 6. Gains from the alienation of any property other than that referred to in paragraphs 1 to 5, shall be taxable only in the contracting State of which the alienator is a resident. ************ NOTES:- 1. Substituted vide NOTIFICATION NO. 10/2017 dated 14-02-2017 before it was read as, 4. Gains from the alienation of shares or similar rights being shares in a company, the assets of which consist principally of immovable property situated in a contracting State, may be taxed in that State. Gains from the alienation of an interest in a partnership, trust or estate, the property of which consists principally of immovable property situated in a contracting State, may also be taxed in that State.