Careers  |   Contact Us  |   Consultant Area  
User ID
> Forgot Password?
> Register
  NY DJIA 26,151 6.62%
  NY NASDAQ 7,909 11.42%
  London FTSE 7,421 7.86%
  Tokyo Nikkei 21,688 -0.57%
  Shanghai SSE 3,242 23.28%
  Frankfurt DAX 11,905 8.92%
  Paris CAC 40 5,456 11.14%
  Singapore SGX 3,330 7.07%
  Malaysia KLSE 1,637 -2.24%
  Thailand SET 1,663 1.73%
  GBP 0.77 0.86
  JPY 111.13 125.22
  EUR 0.89 -
  USD - 1.13
  CNY 6.72 7.57
  CAD 1.33 1.50
  AUD 1.40 1.58
  HKD 7.84 8.83
  Gold $1,308.10 4.72%
  Brent Crude $70.91 17.23%
  Silver $15.19 2.43%
  Platinum $892.02 10.70%
  Natural Gas $2.70 -34.31%
  Wheat $459.50 -12.89%
    Updated On 10-04-2019
<< Back to Country List  

Israeli residents are subject to individual income tax, social security tax and capital gains tax on a worldwide basis. Nonresidents are taxed on income sourced in Israel. The Israeli tax system moved from a territorial to a personal system in 2003.

An individual is resident in Israel if that person's "centre of vital interest" is in Israel. (The definition is a combination of criteria as defined in case law and as used in practice.)

The number of days an individual spends in Israel and overseas also affects residence status: an individual will be deemed to be resident if that person spent 183 days or more in Israel or if in the current tax year spends 30 or more days in Israel, and the total period of the stay in Israel in the tax year and in the two preceding tax years on a cumulative basis amounts to 425 days or more.

As from 2007, an individual is considered a foreign resident if he/she left Israel for two consecutive years (183 days in each year) followed by two consecutive years in which his/her centre of vital interests was located abroad.

Withholding taxes are generally final for nonresidents, who need not file an income tax declaration.

Taxable income and rates
As noted above, Israeli resident individuals are taxed on worldwide income.

Furthermore, foreign residents are exempt from tax on capital gains arising from investments on Tel Aviv Stock Exchange-listed securities. They are also exempt (subject to meeting several criteria) from capital gains on profits deriving from the disposal of Israeli company securities made between 1 July 2005 and the end of 2008, irrespective of when these profits are realised, unless the investee company's main assets are real property.

Moreover, a tax exemption is available on capital gains from the sale of Israeli securities purchased by nonresidents as from 1 January 2009, provided the gains are not attributable to a permanent establishment of the seller in Israel and the company's assets are mainly real estate. This tax exemption should apply only to the extent that the seller reports the sale to the tax authorities.

A new Israeli resident and a "senior" returning resident will not be subject to the reporting requirements in Israel for income derived from or accrued outside of Israel, or sourced from assets outside of Israel for the 10-year benefit period.

A medium-term tax reduction programme provides for a decrease in the top marginal personal income tax rate from 46% in 2009 to 44% in 2010. A reduction in marginal rates for lower income bands is larger, with the 2009 personal marginal tax rates for "earned income" for the year 2009 as follows: 10% for income up to NIS 50,040; 15% from NIS 50,041 to NIS 89,040; 23% from NIS 89,041 to NIS 133,680; 30% from NIS 133,681 to NIS 192,000; 32% from NIS 192,001 to NIS 413,400; and 46% for income above NIS 413,401.

The rates of tax on unearned income are 15% on nominal interest payments, 20% on interest payments that are index-linked and 20% on dividends. Individuals classified as "significant shareholders" will pay 25% tax on dividends and the consumer price index-linked interest payments and 20% on unlinked payments. Amendments have established 20% as the sole rate of capital gains tax for households on all investments, and 25% for significant shareholders (that is, holders of more than 10% of the company).

Determination of taxable income
All income from employment and business is taxable, including the value of fringe benefits and cost-of-living allowances. From January 2003, passive income from bank deposits and savings, both in Israel and overseas, is taxable. Expenses that attract tax benefits include social welfare contributions for the self-employed, life insurance premiums, and payments to pension and provident funds.

Tax liabilities are partly offset by tax credits, which are based on a point system and deducted from the income tax liability. Each credit point is worth NIS 189 per month, or NIS 2,268 per year. Married or unmarried resident taxpayers are granted 2 credit points. In addition, working women - married or unmarried - receive an additional 0.5 credit point, and working women are entitled to an additional point for every child. Point values are fully linked to the cost-of-living index.

A mandatory health tax is withheld at source at a rate of 3.1% for monthly income up to NIS 4,598 and 5% for income exceeding that amount, up to a ceiling of NIS 36,760 (as of 1 January 2008).

The employee funds social security taxes at 0.4% on the first NIS 4,598 of income per month and 7% on income exceeding that amount up to a ceiling of NIS 36,760. Employers' contributions are 3.85% on the first NIS 4,598 of income per month and 5.68% on income exceeding that amount up to a ceiling of NIS 36,760. Foreign expatriates are subject to lower tax brackets. The deduction from the employee is 0.04% for the first NIS 4,598 and 0.87% thereafter, up to the ceiling. The employer pays 0.8% up to the same ceiling. Foreign expatriates are not covered by the national health insurance scheme.

Special expatriate tax regime
Expatriate experts (i.e. "approved specialists" or nonresidents approved by the Investment Centre) are taxed at a maximum rate of 25% up to a ceiling. Other expatriates are subject to ordinary tax rates, but foreign residents do not receive tax credits. Double-taxation agreements generally restrict the taxation of short-term assignees who receive their salaries from abroad to the country of residence.

Capital Taxes
Local taxes are levied on property. There is no wealth tax, inheritance tax or estate duty in Israel, although capital gains tax may arise on assets received through an inheritance or on the sale of the asset.


Source: Deloitte

<< Back to Country List



Feb 2019
Vietnam: a land of opportunity for investors, A sea of change: economic growth has given the popular holiday destination a thriving capitalist culture.
Feb 2019
Britain’s FTSE share index will not climb beyond its record high in the next two years, according to a Reuters poll, as concerns over the terms of the country’s divorce from the European Union and rising volatility keep investors on edge.
Jan 2019
German fund inflows for 2018 already ahead of last year
Jan 2019
Zinc is dull but useful, and it’s in short supply – it’s time to buy!
  Site Map   |    Disclaimer   |   Glossary of Terms © 2010 Questor Capital. All rights reserved.  
Questor Capital Ltd. has offices in Malaysia, Singapore and Thailand and is regulated in Malaysia by Labuan FSA (License Number BS200649).
Thailand group management office (License Number 1755201886).