{"id":8535,"date":"2025-09-30T13:13:13","date_gmt":"2025-09-30T13:13:13","guid":{"rendered":"https:\/\/aboulafia.co.il\/?p=8535"},"modified":"2025-09-30T13:13:13","modified_gmt":"2025-09-30T13:13:13","slug":"spouses-taxation-of-joint-income","status":"publish","type":"post","link":"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/spouses-taxation-of-joint-income\/","title":{"rendered":"Spouses \u2013 taxation of joint income"},"content":{"rendered":"

Feel free to join the\u00a0<\/em>Tax in Israel Facebook group<\/em><\/a><\/p>\n

As previously\u00a0mentioned<\/a>, tax files in Israel are joint between husband and wife. The question therefore arises as to how joint income is taxed.<\/p>\n

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In this respect, the law differentiates between earned (e.g. salary, self-employment, pension) and passive income.<\/p>\n

<\/div>\n
Passive income<\/u><\/div>\n
<\/div>\n
In general, passive income is treated as joint income and added to the earned income of the higher-earning spouse.<\/div>\n
<\/div>\n
However, with the exception of using the exemption for Israeli residential properties, any income arising from an asset owned by one spouse for at least one year prior to marriage or from an asset received by inheritance after marriage can be treated as that spouses\u2019 income only.<\/div>\n
<\/div>\n
Earned income<\/u><\/div>\n
<\/div>\n
In general, spouses\u2019 earned income are completely seperate from each other. As such, each spouse\u2019s income is taxed separately.<\/div>\n
<\/div>\n
However, there are situations whereby both spouses work in the same business. For this to be an issue, the business must be controlled by one of the spouses (e.g. we\u2019re not talking about husband and wife both working in the same hospital)<\/div>\n
<\/div>\n
In this situation, the main spouse in the business cannot give income to the spouse who just helps out \u2013 and all of the income must be taken by the main owner of the business. However, the law (effective 1st January 2014) allows the other spouse to get some income of their own, provided that the following three conditions are all met:<\/div>\n
<\/div>\n
1. Both spouses\u2019 work is required for the business.<\/div>\n
2. Each spouses\u2019 income is commensurate with their contribution to the business.<\/div>\n
3. If the business is run from the family home, the home is the primary place of business. For example, an electrician with the spouse acting as secretary from home would not meet this criteria.<\/div>\n
<\/div>\n
As this is a new law, it is not entirely clear how the tax authority will approach these situations, and what sort of proof will be required. If this is relevant to your business, take advice!<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Feel free to join the\u00a0Tax in Israel Facebook group As previously\u00a0mentioned, tax files in Israel are joint between husband and wife. The question therefore arises as to how joint income is taxed. In this respect, the law differentiates between earned (e.g. salary, self-employment, pension) and passive income. Passive income In general, passive income is treated […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[200,253],"tags":[],"class_list":["post-8535","post","type-post","status-publish","format-standard","hentry","category-israeli-taxation-en","category-binyamin-radomsky-en"],"acf":[],"yoast_head":"\nSpouses \u2013 taxation of joint income - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/spouses-taxation-of-joint-income\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Spouses \u2013 taxation of joint income - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df\" \/>\n<meta property=\"og:description\" content=\"Feel free to join the\u00a0Tax in Israel Facebook group As previously\u00a0mentioned, tax files in Israel are joint between husband and wife. The question therefore arises as to how joint income is taxed. In this respect, the law differentiates between earned (e.g. salary, self-employment, pension) and passive income. 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