It has long been customary to apply to the Israeli Tax Authority for advance tax rulings, or "pre-rulings," before proceeding with big deals. This practice has now been enshrined in law pursuant to the recently enacted Amendment 147 to the Income Tax Ordinance. The aim is to reduce tax uncertainty, especially for large transactions and transactions involving foreign residents. The new rules allow taxpayers to apply to the Israeli Tax Authority for a ruling relating to the tax liability under the Income Tax Ordinance, Real Estate Taxation Law, VAT Law, the Laws For The Encouragement of Capital Investments, Industry and Agriculture and all provisions relating to the said laws. The ruling application must be submitted before the due date for filing the annual income tax return concerned or before the execution of a transaction in real estate and VAT cases. An application may not be withdrawn without the Tax Director's permission. The application may be anonymous but the ruling will only be issued after the applicant is identified. A tax ruling commits the Tax Director, unless the information or documents submitted were incomplete, false or "if the circumstances relating to the ruling have changed." If the ruling was issued by agreement, the applicant is also committed to keep to the ruling, unless the intended transaction did not proceed. The Tax Director may charge a fee and may publish anonymous summaries of the rulings. The new law also contains provisions concerning tax shelters. The Minister of Finance may, with the approval of the Knesset Finance Committee, prescribe reportable tax planning acts - including sale transactions and real estate transactions. Once such acts are reported, the Assessing Officer may issue a partial best judgment assessment of a taxpayer's income and tax due disregarding the reportable tax planning. If the act was considered to be artificial or fictitious, a deficiency fine of 30% of the shortfall may be levied and additional fines or imprisonment for a year may also be imposed. These provisions echo reportable tax shelter rules in the US and UK and have stirred much controversy. It remains to be seen which acts will be prescribed as reportable tax planning acts - this is a bone of contention for those who wish to know in advance what not to do. It is interesting to note that the legislation allows the partial assessments to be issued by agreement with the taxpayer, but don't bet on it. Leon.firstname.lastname@example.org The writer is an International Tax Partner at Ernst & Young Israel.