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

As we described in an earlier post (see here), certain deductions can be claimed, even if they are not direct business expenses. This post will look at some of these in greater detail. The tax saving for the deduction allowed will depend on your marginal rate of tax, including Bituach Leumi (if you’re self-employmed). Disability insurance ביטוח אובדן כושר עבודה You are able to take out insurance that will pay you a monthly “salary” if you are forced to stop working for a period of time due to certain health issues (check with your insurance agent for precise details). The premiums paid are tax-deductible,

In a previous post, we considered who was required to file a tax return. However, it could be that even if you are not required to do so, it will be on your interests – if you are due a refund. Any refund due to you is given back with the addition of interest (4% per annum) and linkage – all tax free. You can’t get anywhere near that in the banks these days, and even the most successful investments would be hard-pressed to give you such a favourable post-tax return! You are able to apply for refunds – which necessitates filing a

A very common investment for people is property, i.e. receiving rental income. For these purposes, property income refers to income from any type of property (rents), including land (i.e. ground rent). This post will not deal with gains made on the sale of any property. For tax purposes, the nature and place of the property affects the way tax is levied in Israel. Israeli properties Residential properties As part of government housing policy, there are a number of tax-breaks and schemes available to those who have rental income from residential property in Israel – i.e. the property is being used to live in (rather than for business purposes). If your

In addition to Income Tax, Israel levies Bituach Leumi (National Insurance or Social Security) on earned income (and certain passive incomes). To all intents and purposes, this is another tax, although there are certain social benefits that accrue from making regular payments (e.g. maternity pay, disability pay, pension etc). Bituach Leumi is calculated on a monthly basis, not on a yearly basis. There are also virtually no exemptions for salaries. There are two rates for Bituach Leumi. The lower rate (3.5%) is for salaries of up to NIS 5,297 per month. Salaries above this amount, and up to NIS 42,435 are taxed at the

In the previous post, we mentioned that a portion of employer contributions towards an employee’s pension scheme is not treated as a taxable benefit. In this post I will set out, in short, some of the laws regarding pension and severance pay. It is important to start this post by discussing the concept of “base salary – שכר יסוד.” As implied, this is the gross salary that you earn each month before any additions. In some professions, this can represent a relatively small part of the salary; the main salary is then bolstered by commissions, overtime pay etc. Since 2008, the law has required