Asnin-Dan CPAs (Israel) 
63 Haodem ST
Shoham, Israel 60850
ph: 972-3-9772717
fax: 972-3-5480377
info
Corporate taxation
Principals:
• An Israeli corporation has to report on any income from any source in any geographical location in the world.
• Corporate tax rate is 24% in 2011, and is expected to be reduced to 18% until 2016 (this is on hold due to the goverment decision).
• On dividend paid to shareholders a 20%/25% is withheld
Determination of residency:
- Registration in Israel
- Management and control is from Israel
Tax benefits to Corporations:
- if you start a business that own an industrial plant and you manfacture (developing programs may also be considered as manfacturing)
- if you export 25% of your turnover
- if you fulfil all of the above criteria you may get a 'preferred status' which will grant you the following tax benefits:
- 6%-12% corporate tax rate (depands on your location)
- 15% on dividends
Business activity of foreign Corporations in Israel:
most of the tax treaties Israel has signed determine that foreign company is subject to Israeli taxation only on profits generated from Israel. Office/warehouse/factory can help to determine such activity.
To avoid unnecessary tax uncertainty it is recommended to open an Israeli company for the activity that is managed in Israel.
what is new?
the decision to reduce corporate tax rate until 2016 is now on hold. the current tax rate (24%)
the goverment is checking possiblity to increase corp tax to 25% in 2012.
63 Haodem ST
Shoham, Israel 60850
ph: 972-3-9772717
fax: 972-3-5480377
info
