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Updates:
July 1, 2009:
Our accounting firm moved to new premises at Shekel Towers, 168 Jabotinski st. Bnei-Brak.
December 20, 2008:
The new website of Shpilberg CPA is in the Internet
Israel Tax Updates
Israel taxes 2018
February 2018
Starting January 1, 2018 the corporate income tax rate in Israel is reduced from 24% in 2017 to 23% in 2018. The tax rate will be further reduced to 20% by 2021.
The personal income tax rates are 10% to 47%, the top marginal 47% rate relates to monthly income exceeding IS 41,530.
The standard VAT rate in 2018 is 17% , same as in 2017.
Israel Voluntary Tax Disclosure
July 2016
The Israeli tax authorities announced an additional extension of six months for voluntary disclosure till December 31, 2016 by taxpayers.
According to the regulation taxpayers can report their unreported income and assets abroad without facing a criminal offence while paying the due tax.
From the beginning of the voluntary tax disclosure regulations Israelis filed 5,000 applications totaling about unreported IS 17 billion.
Israel Tax Rates Cut
September 2015
The Israeli prime minister and finance minister announced on September 3, 3015 that the standard V.A.T. and corporate income tax rates will be reduced.
Starting October 1, 2015 the V.A.T. rate will be reduced from current 18% to 17%.
The corporate income tax rate will be reduced from current 26.5% to 25% starting January 1, 2016.
Israel Purchase Tax Rise
June 2015
The Israeli parliament approved on June 22 a rise in the real estate purchase tax effective June 24.2015.
The rise relates to investors owning more than one flat on the date of purchase.
For flats valued under IS 4.8 million the new tax rate will be 8% compared to previous the previous 5% 7% rate.
For flats valued above IS 4.8 million the rate will increase to 10% compared to the previous 8% rate.
Israel Minimum Salary Rise
December 2014
The Israeli workers union and the board of economic organizations signed an agreement on December 3, 2014 to raise the minimum monthly salary in the private sector from current IS 4,300 to IS 5,000. The salary will rise in three phases starting April 1, 2015.
The Israeli government plans to broaden the minimum salary rise to the public sector too.
Currently the exchange rate is around IS 3.90 to one USD.
Israel Tax Amnesty
September 2014
The Israeli tax office announced on September 7, 2014 a new tax amnesty. The new tax amnesty regulations replace the existing regulations.
According to the amnesty Israelis who have failed to report their income in the past years can now adopt a "voluntary tax report" of their unreported income, pay the tax due thus avoiding criminal suit by the tax office.
The voluntary reporting has two tracks,. Track one includes a reporting by a representative, e.g. an accountant or a lawyer, without exposing the taxpayers name and details which will be exposed only once the tax due is paid.
Track two, the abridged track, applies when the total unreported assets do not exceed IS 2 million and the resulting income from these assets does not exceed IS 0.5 million.
The new regulations are valid for one year. They apply only if there is no existing tax inquiry by the tax authorities against a specific taxpayer.
Israel Tax Rates Update
February 2014
Starting January 1, 2014 the new corporate income tax rate in Israel is 26.5% compared to the previous 25% rate.
There are also new tax rates for real estate purchase tax .First flat buyers are exempt from tax for purchase of flats valued under IS 1,517,210.
Such buyers pay 3.5% tax on the value exceeding IS 1,517,210 up to IS 1,799,605.
Buyers owning more than one flat pay purchase tax ranging from 5% to 10 % . The 10% rate relates to real estate exceeding IS 15,475,835.
Note: the current exchange rate is IS 3.50 equal 1 USD.
Joint Tax Calculation
November 2013
The Israeli finance minister announced on November 11, 2013 that starting January 1, 2014 the previous regulation relating to joint income tax calculation would be cancelled.
At present there are strict rules for separate tax calculation for a couple working in the same business allowing a maximum income of IS 50,000 ceiling for separate tax calculation.
Starting 1.1.2014 a couple with a joint IS 30,000 monthly income from the same business would have a monthly tax reduction of IS 3,796.
Personal Tax Update
November 2013
The Israeli finance minister announced on November 25, 2013 that the planned increase of personal income tax rates which was due starting 1.1.2014 is cancelled.
Originally the personal income tax rates were expected to increase by 1% for monthly income exceeding IS 5,280 and by 2% for monthly income exceeding IS 40,000.
The planned increase of the Israeli corporate income tax rate from 25% to 26.5% effective 1.1.2014 remains as planned.
Israel New 18% V.A.T. Rate
June 2013
Starting June 2, 2013 the new V.A.T. rate in Israel is 18% compared to the previous 17% rate.
The Israeli cabinet also approved in its 2013-14 budget to increase the corporate income tax rate and the personal income tax rates starting January 1, 2014.
The income tax rises have yet to be improved by the Israeli parliament by July 2013.
Israel New 17% VAT RATE
August 2012
Starting September 1, 2012 the VAT rate will increase from the current 16% rate to 17%.
Starting January 1, 2013 there will be some income tax changes. An additional 1% income tax will be imposed on monthly income between IS 14,000 – IS 40,230.
A new surtax of 2% will be imposed on monthly income exceeding IS 66,667 resulting in a top marginal 50% tax rate compared to the previous 48% rate.
Employer's social security contribution will rise in 2013 from the current 5.9% rate to 6.5%.
Israel Online VAT Filing in 2012
January 2012
The Israeli tax office released data regarding VAT taxpayers who are obliged to file online detailed VAT reports starting January 1, 2012.
All taxpayers ,excluding financial institutes and non-profit organizations, whose turnover in 2011, including VAT, exceeded IS 2.5 million, or even with a lower turnover if these taxpayers must use double entry bookkeeping records according to the income tax regulations.
Non-profit organizations regardless of the number of their employees whose turnover in 2010 exceeded IS 20 million.
Financial institutes, e.g. banks and insurance companies , when their turnover in 2010 exceeded IS 4 million.
Repeal of Certain Capital Gains Exemption for Foreigners
July 2011
Starting July 7 Israel repealed the exemption granted to foreign residents for capital gains derived from state loans bearing a date of maturity of less than one year.
The repeal is aimed to prevent speculative transactions by foreign players causing appreciation in the foreign exchange market.
Israel Tax Rates 2010
January 2010
There are reduced tax rates in 2010 compared to 2009.
The corporate income tax rate in 2010 is 25%, compared to 26% in 2009.
Personal income tax rates for 2010 are 10% -45%, compared to 10%-46% in 2009.
Israel new V.A.T. Rate
July 2009
From 1.7.2009 the new V.A.T rate in Israel is 16.5%, compared to the previous 15.5% rate.
Sale of fruit and vegetables and services to foreign residents remain tax exempt ,contrary to the government's original plan to impose 16.5% on such sales and services.
Israel U.K. Double Taxation Treaty
April 2009
Israel and the U.K. signed on April 6 2009 a new protocol to the existing double taxation treaty between the two countries.
The new treaty relates, inter- alia, to tax withholding rates from payments of dividends and interest on government bonds, certain corporate bonds and pension funds.
The treaty exempts, for the first time, U.K. pension income of newcomers to Israel. In addition capital gains and royalties would be tax exempt in the country of origin.
Thus Israel residents would pay no tax in the U.K. on capital gains generated in the U.K., only in Israel, and vice versa.