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Israel's Tax Authority explains its stance on classification of SAFE instruments

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Israel

  • On 16 May 2023 the Israeli Tax Authority released a statement, outlining the conditions under which investments made using Simple Agreements for Future Equity (SAFE) would be considered a down payment for future issuance of company shares (rather than a loan).
  • Consequently, no tax event would occur upon the issuance of future shares in a company under a SAFE, and there would be no withholding oblig…

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