We have previously discussed who is required to file a tax return in Israel – see here for more details. As part of the tax authority’s attempt to ensure that everyone pays their fair share of tax, a recent amendment to the tax law has added a further three situations which would require a person to file a tax return. These will come into effect for the 2016 tax filings: 1. Anyone who is a beneficiary of a trust (irrespective of whether distributions are received), provided that: They are aged 25 or above The value of the trust assets exceeds NIS 500,000 They are

One of the most frequent questions I receive from people is-Do I have to file a US tax return? In general, US citizens and green card holders are required to file US tax returns reporting their worldwide income if their income exceeds a certain threshold.  For example in tax year 2015 if you were single and under age 65 you would be required to file a return if your worldwide income exceeded $10,300.  Attached are pages 8-10 from the IRS instructions to form 1040 which detail the various filing thresholds for tax year 2015.  There are exceptions to this threshold- the most

When a US citizen who lives abroad passes away and their property is not being administered by an executor or administrator appointed, qualified and acting within the United States, obtaining a transfer certificate from the Internal Revenue Service (IRS) is necessary in order to transfer US source assets to the heirs if the value of the estate is less than $5,430,000 in 2015 and $5,450,000 in 2016(this threshold changes on a yearly basis). If the value of the estate is over this amount instead of obtaining a transfer certificate the taxpayer must file a form 706-United States Estate Tax Return. 

Please feel free to join the Facebook group linked to this blog – search for “Tax in Israel” As previously discussed, all employees are required to fill in form 101 for each place of employment, and give it to the person in charge of the salaries. Technically, this needs to be filled in on the 1st of January (for continuing jobs), but for practical reasons it’s sufficient to have it filled out before the January salary is processed. If your employer doesn’t give you one, you can download a blank form from the tax office here. Below is a short guide to filling in the form

With the end of the tax year fast approaching, here are a few tips that may be relevant: If you haven’t already done so, make a claim for the Working Tax Grant(negative income tax) in respect of 2014 income. The deadline is Friday 25th December. If you are a business with inventory, take a count as close as possible near the year-end. The cost of each item should be listed alongside the quantities. Business owners should make top-up payments towards pension, Keren hishtalmut etc to take advantage of the tax breaks available. The same goes for salaried individuals who have private pension plans.

The latest amendment to the tax law was publicized last week. Among the sections included in the new law was a section dealing with the circumstances in which the Israeli Tax Authority is permitted to exchange information with other tax authorities across the world. Without going into the details of the law, suffice to say that we can expect the flow of information to start in the relatively near future (likely 2017, 2018 onwards), and those who have hitherto unreported income – specifically in foreign countries – are ever-more likely to become exposed. It goes without saying that a person coming forward

As we have seen previously in this series, tax is levied in Israel in one way or another wherever there is at least one Israeli resident in the picture of a trust (with the potential exclusion of those within their 10-year exemption for new or returning residents). The next few posts will look at some of the potential tax traps that can occur as a result of this legislation. Whilst it may not be possible to get around these issues with trusts that are already in existence, for those trusts that are in the process of being settled and worded, it

Feel free to join the Tax in Israel Facebook group In a somewhat surprising move, the tax authority announced yesterday that they have sent out letters to approximately 1,700 people whom they think might be eligible for a tax refund in respect of the 2012 year. This is of course a welcome move by the tax authority, but it is laced with danger. As we’ve previously discussed, there are numerous reasons why a refund might be due (see here for example). BUT, as the tax system is not simple, you may actually OWE money to the tax man, so be sure to seek advice first. And it is important to

The decrease in the rate of VAT (from 18% to 17%) is coming into effect on 1 October 2015. Prices need to be updated at that time. How does this affect a business’ reporting requirements? With regards to expenses, ensure that you take the VAT as shown on the tax invoice (חשבונית מס) – there are some situations whereby a single invoice will have both the lower and higher rates of VAT charged. The most likely examples are your electric and telephone bills. Onto income reporting. For those businesses reporting on a monthly basis, nothing really changes as your income for the month of

Three stories of interest from the last few days: (1) The threshold above which you can no longer remain an osek patur (see here) magically increased to NIS 100,000. And according to the tax authority website, this came into effect as of 1st January 2014! Needless to say that this has caught everyone by surpise; not least those who “upgraded” to osek morshe when their income went over the 80k limit. At this stage, there is no official word from the authorities about what to do in such a situation, but I would doubt that they would allow someone to revert to osek