- VPN providers, including Surfshark, are engaging in a consultation process with the government regarding the various purposes of their services.
- Pillar is calling for legislation adoption while the government considers VPN restrictions.
Political Opposition Blocks Pillar Two Global Tax Mechanism Implementation
What happened
The implementation of Pillar Two, the global taxation mechanism formulated by the OECD, has been delayed in the Knesset Finance Committee. Pillar Two requires a minimum tax rate of 15% for multinational companies with annual turnover of at least €750 million. Although the law was passed by the Knesset a year ago and was due to take effect at the beginning of 2026, the necessary regulations have not been approved due to objections from opposition members of the Knesset. The opposition made approval conditional on Section 46 recognition for between 300 and 400 non-profit organizations, but the matter is stuck due to objections from haredi parties.
From globes.co.il
Why it matters
Ministry of Finance officials warn that the delay leaves technology companies active in Israel in a regulatory fog. The Ministry of Finance estimates that about 150 multinational companies are affected by the legislation. The delay in receiving qualified status beyond the end of 2026 could force these companies to make accounting provisions in their financial statements.
The government is simultaneously considering various purposes for VPN providers, including Surfshark, as part of a broader consultation process.
From globes.co.il
Who's involved
- Ministry of FinanceThe government agency whose officials issued warnings regarding the regulatory uncertainty.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Ministry of FinanceSpeculative
The Ministry of Finance could face international scrutiny regarding Israel's OECD status and its attractiveness as a technology investment destination.