Is my Cyprus company a controlled foreign company under Israeli tax rules?
Short answer
It can be. An Israeli resident with 10% or more of the means of control can be taxed on profits the company has not paid out, if its income is mostly passive and taxed at an effective rate of 15% or less. Cyprus's 15% rate does not take a passive company out of the rules.
Passive income means interest, dividends, rent, royalties and gains. A Cyprus company with a real trading business, staff and customers is in a different position; the test looks at what the income is.
The rules apply to Israeli residents. Once you have moved your centre of life to Cyprus and ended your Israeli residency, they stop applying to you.
Sources
- PwC Worldwide Tax Summaries: Israel, group taxation and CFC rules taxsummaries.pwc.com
- Cyprus Tax Department: Tax Reform 2026 gov.cy
Information, not advice. This answer describes the published rules as they stand on 12 October 2026, checked against the sources listed. Tax and residence rules depend on your own circumstances and change; check your position with a tax adviser qualified in Israel and in Cyprus before you act on it.
Ready when you are.
Tell us where you are, where you are going and what the company will do. We reply with your price, in writing, and a time to talk.
