Tax authorities around the world like to use a “standard-of-living” test to assess whether taxpayers are declaring all of their income. Essentially, someone with a low earning should not be living in a mansion – unless there’s some sort of decent explanation e.g. inheritance. In Israel, the system is more
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
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
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
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
In the previous post, we discussed that employee benefits are subject to taxation. This post will look at some of the more common payments and benefits from employees, and how they are dealt with for tax purposes. Travel allowances The law requires that employers pay their employees reasonable travel costs
Most people look forward to receiving their monthly payslip, known as a תלוש משכורת or just tlush. The Israeli tlush is a highly complicated piece of paper containing a huge amount of information. Below I will set out some of the information that you should expect to see, and what
At the end of the last post, I made mention of the importance of section ‘ה on form 101. This section tells the employer whether you have another employment. If so, you need to indicate if this particular employment is your main job. If it is, the employer will tax
Over the next few posts, we will cover many aspects pertaining to employment income – relating to the obligations of both employer and employee, with specific focus on employee rights and taxation. As discussed previously, a person whose only income is their salary is not required to file a tax
A number of years ago, the government introduced a scheme designed to help workers earning very little. This grant, based on average monthly earnings in the previous tax year (hence the term “income tax”), was initially available only to those living in certain parts of the country. Grants for 2012
