YOUR TAXES: Coronavirus grants, Zoom precautions, tax treaty rules

money (photo credit: REUTERS)
money
(photo credit: REUTERS)
The coronavirus pandemic continues to present economic challenges. We have previously discussed Israeli unemployment pay for people laid off, and grants for certain self-employed Israelis. Here are a few more challenges and potential solutions.
Adaptation grants
Laid off employees ages 67 and above and company owners are not entitled to unemployment pay under the coronavirus emergency regulations. But they may perhaps qualify for an “adaptation grant” (Ma’anak Histagkut). The main conditions are:
Age 67 or older

Israeli resident

Dismissed or laid off in the period March 1-April 19, 2020, for at least 30 days
Employee in the three preceding months

Pension not exceeding NIS 5,000 from work or service in the army, police or prison service
The grant for March ranges from NIS 1,000-NIS 2,000 depending on other pension income (excluding state pension). The grant for April ranges from NIS 1,000-NIS 4,000. No grant is paid if other pension income exceeds NIS 5,000 (per month, apparently).
The National Insurance Institute is expected to clarify whether company owners may be eligible.
Zoom meetings

The Zoom video conferencing software product has become popular for business and social online meetings. However, it has become popular with hackers, too. The Israeli National Cyber Directorate has published some recommendations on how to keep away unwanted guests from your Zoom meeting and your data. This matters especially for businesses operating from home. Among the recommendations:
Announce the meeting privately not publicly
Use a password
The host should lock out new attendees once the invitees have shown up. This is done at the time of the meeting by clicking below Manage Participants/More/Lock Meeting. Alternatively, on some versions of Zoom when the host schedules the meeting he/she can set up a Waiting Room and at the time of the meeting the host only clicks Admit for invited guests.
Don’t record meetings
Don’t share confidential documents on Zoom
Other more technical recommendations
OECD on tax treaty rules

The OECD published on April 3 a “careful analysis” of international tax treaty rules and the impact of the COVID-19 crisis. These deal with matters of extreme interest to international businesses, immigrants and employees on relocation who find themselves in the “wrong” country and can’t travel because of coronavirus.
Residency
If a person gets stranded away from their home country by reason of the COVID-19 situation, perhaps on holiday, perhaps to work for a few weeks, the OECD says the temporary dislocation should not result in a change of fiscal residency. This is because there should be no change in their permanent home or center of vital interests or habitual abode. This might be relevant to immigrants stranded visiting their old country, or non-immigrants stranded visiting Israel.
The OECD says the same may apply if someone who relocates to work in another country becomes resident there but returns temporarily to the old home country. This may be relevant to Israelis who relocate to the US and become US residents but get stranded on a temporary visit to Israel.
Control and management

Can the fiscal residency of a company change due to a temporary change in location of the CEO and senior executives? The OECD’s careful analysis says no. 
“All relevant facts and circumstances should be examined to determine the “usual” and “ordinary” place of effective management, and not only those that pertain to an exceptional and temporary period such as the COVID-19 crisis”
Permanent establishment (branch)

Can a company be deemed to have a permanent establishment (PE, taxable branch) in another country due to an employee working from home there? The OECD careful analysis says no. 
“During the COVID-19 crisis, individuals who stay at home to work remotely are typically doing so as a result of government directives: it is force majeure not an enterprise’s requirement…. The home office would not create a PE for the business/employer, either because such activity lacks a sufficient degree of permanency or continuity or because, except through that one employee, the enterprise has no access or control over the home office.”
Israel is a member of the OECD, so OECD recommendations and decisions apply in Israel unless the state abstains or expresses a reservation. On the other hand, the Israel Tax Authority could argue that the OECD careful analysis mainly applies in cases of dual residency, i.e. a tax resident in two countries. Each case needs checking out.
As always, consult experienced tax advisers in each country at an early stage in specific cases.
The writer is a certified public accountant and tax specialist at Harris Horoviz Consulting & Tax Ltd. [email protected]