We would like to update you that on 14 January 2026 the Options Department of the Israel Tax Authority published a relief intended to reduce bureaucracy and expedite the handling of applications for ‘Green Track’ tax rulings (pre-rulings) in a number of matters relating to employee equity awards, as detailed below (‘net exercise’ mechanisms, ‘dividend adjustment’ mechanisms and ESPP plans).
Going forward, with respect to the four ‘Green Tracks’ specified below, the trustee and the company will submit a notice to the Tax Assessing Officer in lieu of filing an application for a ‘Green Track’ tax ruling together with all appendices and declarations. Practically, this means that in connection with these four tracks, the notice submitted by the trustee and the company will constitute an adoption of the wording of the applicable ‘Green Track’ tax rulings, in the form published on the Israel Tax Authority’s website as of the date of submission.
This is a significant procedural relief; however, it is important to verify in advance that the company and the trustee fully and properly comply with the terms and requirements of the relevant track.
The tracks under which a notice may be filed instead of an application for a ‘Green Track’ tax ruling are:
- ‘Net exercise’ of employee options in a public company (NET EXERCISE) – Form 912
- Adjustment mechanisms due to changes in capital, bonus share distributions and dividends – Form 922
- ESPP without a trustee – Form 927
- ESPP with a trustee – Form 926
For links to the wording of the above tax rulings, as published on the Israel Tax Authority’s website, click here (In Hebrew)
For a template notice for filing under these tracks, click here (In Hebrew)
This update is for informational purposes only and does not constitute legal advice.
