In recent years, the Israeli Tax Authority (ITA) has been considering the appropriate transfer pricing method for the taxation of research and development (R&D) centers of multinational enterprises (MNEs) in Israel.Traditionally, R&D centers in Israel have been remunerated under the cost-plus method. However, the ITA’s position as expressed recently is that, in many cases, the appropriate profit allocation method should be based on the profit split model.At a recent public conference in which the professional department of the ITA participated (the Conference), a senior official identified the criteria that would be used for such a determination.The ITA is currently drafting...