Category Taxation in Israel

Israel Caps Executives’ Salaries

March 30, 2016 Taxation in Israel

These won't get you far in Israel.JERUSALEM – Fifty high-level executives of banks and financial institutions in Israel will soon face salary cuts, as new tax rules are brought in to cap excessive pay packets.

Earlier this week the parliament of Israel approved tax changes aimed at capping the salaries of high-level executives at a maximum of ILS 2.5 million (approx. USD 657 thousand) in order to reign in income inequality.

Any salary payments of over ILS 2.5 million per year paid by a bank or financial institution will no longer be deductible when calculating corporate income tax obligations of the business.

The new regulations will also apply to small financial institutions which do not pay such high salaries, but still have a wide pay disparity between top-level and bottom-level workers, as any salary which more than 3...

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Priests in Israel to Pay Tax

February 2, 2016 Taxation in Israel

Tax in IsraelJERUSALEM – Priests and other religious workers in Israel will now need to pay tax on any services, blessings, or religious artefacts that they sell.

In a recent circular the Israel tax Authority confirmed that religious services and goods should be liable for VAT and should be regarded as taxable income for the purposes of calculating income tax obligations.

The Israel Tax Authority has recently been cracking down on the tax affairs of rabbis and other religious figures in an effort to stamp out tax evasion, with a surprise tax audit of approximately 400 rabbis being carried out in December.

The Israel Tax Authority stated that any service, whether it is religious in nature or not, should be liable for income tax if the service was performed in exchange for money.

It was further stated...

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Israel Set to Cut Corporate Tax

December 14, 2015 Taxation in Israel

These won't get you far in Israel.JERUSALEM – Businesses in Israel will soon be enjoying a tax break, as a new proposal to slash taxes looks set to pass through Knesset.

Over the weekend the cabinet of Israel approved a proposal from Prime Minister Benjamin Netanyahu and Minister of Finance Moshe Kahlon to reduce the rate of corporate income tax in the country.

If approved by the Knesset, the rate of the corporate income tax will be slashed by 1.5 percent from 26.5 percent to 25 percent.

The first reading of the proposal by the Knesset will be held on December 14th, with the two subsequent readings to be concluded by the end of December.

If the readings are passed, then the tax cut would come into force in January 1st 2016.

Explaining he need for the cut, the Finance Minister said that “…after we identified that the ex...

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Tax Collections Spike in Israel

May 12, 2015 Taxation in Israel

JERUSALEM – Israel has seen a budget surplus, following a small rise in the collection of tax revenues.

According to new information issued by the Finance Ministry of Israel the tax revues collected over the first four month of this year rose by 6.1 percent compared to the levels seen over the same period during the previous year.

The total tax revenues collected over the four month was approximately ILS 91 billion.

The increase in tax revenues has been attributed to an 8.3 percent rise in the collection of direct taxes, and a 3.5 percent rise in the collection of indirect taxes.

In line with the rise in collections, the government saw a budget surplus of ILS 300 million of the first quarter.

It is expected that the better than forecast conditions will ease the pressure faced by the go...

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Israel Needs to Hike Taxes on Rental Property

December 18, 2014 Taxation in Israel

property tax in IsraelJERUSALEM – Families in Israel will need to take on more debt to pay off their housing costs, unless the government hikes the rate of tax on rental incomes.

House prices in Israel are seeing significant increases in prices due to prohibitive red tape and under-taxation, and the upward price pressure is making it difficult for families to make ends meet, according to information in a new report issued on December 17th by the Taub Center for Social Policy Studies in Israel.

Currently it takes an average of 13 years for residential buildings to be completed in ISrael, with 2 years being spent on construction while approximately 11 years are spent on planning and obtaining licenses, and the excessive time frame is restricting the supply of housing in the country and raising prices.

In additio...

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