A decision of the Supreme Court of Israel was issued on 22 April 2018 concerning whether stock-based compensation (stock options) must be included in the cost base for intragroup research and development services, even in cases where the stock options are not a deductible expense. The decision covers two separate cases involving multinational tech companies that applied a cost-plus approach in determining the appropriate pricing for R&D services performed by their Israeli subsidiaries. As part of the compensation package for the subsidiaries' employees, stock options were provided that were qualified to be taxed under the capital gains track, which includes...