It’s Time to Tackle End of Tax Year Tasks

21/12/2017

2017 tax planning

With the end of the tax year fast approaching, here are a few action items that may be relevant.

For Individuals

If you haven’t already done so, make a claim for the Working Tax Grant (negative income tax) in respect of 2016 income. The deadline is December 29.

If you pay Bituach Leumi without using a standing order, pay by the end of the year to receive the deduction for tax purposes. Those paying on standing order will have the January payment included in the 2017 certificate.

Make donations to recognized charities (section 46), and ensure the receipt is dated 2017.

Start collecting information for “short” tax returns, if relevant:

Israeli property income taxed on the 10% route must be reported and the tax paid by January 31, 2018.
Foreign property income taxes on the 15% route and foreign interest, dividends and/or capital gains must be reported, and the tax paid, by April 30, 2018.

For Business Owners and Self-Employed Individuals

Consider whether you need to increase the amount paid for both income tax and Bituach Leumi. If you don’t increase your payments, expect to pay interest on the extra payments once the tax return is eventually filed.

For Bituach Leumi, this will mean letting them know that you wish to increase by the end of the year.
For income tax, voluntary payments can be made anytime. Interest is fully waived on payments made in January. Interest is waived 50% on February payments and 25% on March payments.

Business owners should make top-up payments towards pension and study accounts to take advantage of the tax breaks available. The same goes for salaried individuals who have private pension plans.

For self-employed individuals, the government now requires that those who are self-employed are required to pay into an Israeli-recognized pension plan. Find more information about exemptions and the amounts due here.

If you are a business with inventory, take a count as close as possible to December 31. The cost of each item should be listed alongside the quantities.

For those running their businesses via corporations, be aware that the corporate tax rate is intended to be reduced by 1% for 2018. As such, it would be worthwhile pushing off some income into January if possible. Similarly, incurring expenses before the end of the year would be advantageous.

Our office would be happy to assist you with getting your reporting in order before 2018 – contact us today.