Lior is a well-known businessman. About two years ago, Lior won a franchise agreement of a known food chain. At the time of acquiring the franchise, Lior paid the chain about ILS 2 million, and invested large amounts in opening the local branch. At the time of the acquisition of the franchise, no agreement was signed between Lior and the chain, and no draft agreements were exchanged between the parties, probably due to the good relationship that existed between the parties at the time.
After 10 years of living in rental, Asaf and Yafit decided it was time to buy their own apartment. Over the years, the couple saved up ILS450,000 and they went to the bank to see if they were eligible for a mortgage. After examining Asaf and Yafit’s pay slips, the bank told them they were approved for financing of up to 75% of the purchase price.
Every employer knows that when they fire an employee after more than one year of employment, that employee is due severance pay.
Similarly, every employer is aware that when the company or the business contracts the services of an independent subcontractor, pays them based on an invoice and does not issue them a salary slip, no obligation exists to pay that contractor social benefits or severance pay, since there is no employee-employer relationship between the parties.
Is that really the case?
Andre Lynn used to own a two-story building in Tel-Aviv - Jaffa. He sold it to a couple and the couple asked the Land Taxation Authorities to define the structure as a “residential apartment” to get an exemption from the betterment tax (for the seller) and reduced purchase tax (for the buyer).
In the business and real estate sphere, many documents are signed that bear the title "Letter of Agreement."
Usually, we are dealing with an initial document succinctly stating the agreement between the parties regarding a certain transaction: the nature of the transaction, price, parties' names and signatures.
Our dear friend, Sali Eilon, C.P.A, is a real-estate tax expert. Just this week, Sali posted an article concerning the change in the VAT rate that is expected to take effect on October 1st, and how this decision might potentially affect the real-estate market.