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
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
An Israeli Resident Trust is a trust that doesn’t meet any of the other definitions of trust types, described in the previous posts. As such, it includes situations whereby: The settlor was Israeli resident when the trust was settled and remains so, and there is at least one Israeli resident
A testamentary trust is one whereby the trust comes into existence as a result of the will of an Isrseli resident upon the death of the settlor. Such a trust is taxed based on the residence of the beneficiaries. If none of the beneficiaries are Israeli resident, the trust is
The Israeli Resident Beneficiary Trust This is any trust whereby the settlor is a non-resident of Israel and has been since settling the trust. Furthermore, at least one beneficiary is an Israeli resident in the current tax year. If there is a family relationship between the settlor and beneficiaries, the
The default position (except for the Family Trust, as mentioned here) is that the trust itself is liable to pay the taxes on the trust income. It is the trustee who is required to file the tax returns and who is responsible for ensuring that the taxes are actually paid.
The biggest change in the 2014 amendments to the trust taxation law relate to these types of trust. This is a trust whereby all of the settlors are not – and have never been since inception of the trust – Israeli resident, but at least one of the beneficiaries is
Feel free to join the Tax in Israel Facebook group The trust laws relate to the revocability of the trust. This can affect which type of tax rules apply to a particular trust (see here for the introduction to trust taxation). This post will consider what makes a trust revocable
In August 2013, the taxation of income within trusts underwent a huge reform, with a vast array of changes to the pre-existing law. The law came into effect as of 1st January 2014, but there are still a number of unresolved issues; particularly pertaining to foreign tax credits. The following
