Asnin-Dan CPAs (Israel) 
63 Haodem ST
Shoham, Israel 60850
ph: 972-3-9772717
fax: 972-3-5480377
info
Individual Taxation
Principals:
- Israeli residents are taxed on Income derived from any source in any geographical territory.
- Tax system is progressive -> your tax rate is increasing together with your income (10%-45%)
- Rules have been determined regarding the origin of the various types of income - active, passive and capital gains
- Only self-employed and shareholders must submit annual report to income tax authority. Employees do not have to report to income tax unless they want to, or they are asked to do so by tax authority (or if their income exceed certain amount).
Who is considered a resident?
- Center of life: location of family/ business/ etc
- Quantity rule: # of days spent in Israel within certain period of time
Tax rates:
- Minimum tax rate on income from work or a business - 10% (maximum tax rate - 45%)
- Capital gains - 20%
- Interest – 20%
- Profit on securities – 20%
- Dividend (if holding less than 10% of the company) – 20%
- Dividend (if holding 10% or more of the company) - 25%
- Rental income – tax free up to certain limit.
Tax credits are given for:
• Kids
• Peripheral areas
• Saving for pension
• Academic degrees
.
What is new?
- Income tax rates are expected to decrease to a maximum of 36% in year 2016.
- The Israeli goverment consistantly issue tax benefits to areas with security issues - such as 'Shderot' - so if you live in such areas you should expect to pay less taxes than if you live in other central areas
- the government is considering now an increase to capital gains tax (from 20% to 25%)
- the govement is considering now an increase to the max tax rate by 3% on high income (48% max instead of 45%)
63 Haodem ST
Shoham, Israel 60850
ph: 972-3-9772717
fax: 972-3-5480377
info
