Impostos a Israel

Tax Rates

Consumption Taxes

Nature of the Tax: VAT - (MA'AM in Hebrew)
Tax Rate: 17% (the VAT rate is set to increase to 18% starting from January 1, 2025).
Reduced Tax Rate: Certain items are zero-rated, including exports of goods; supplies of intangibles to foreign residents; supplies of services to foreign residents, subject to broad use and enjoyment restrictions; hotel accommodation for tourists; leasing private cars to tourists; tourist transportation; supply of monitor services, as well as inspection and coordination services, with regard to clinical trials conducted in Israel.
Not-for-profit organisations pay VAT-equivalent tax (payroll tax) at the rate of 7.5% of their total payroll. The rate is 17% for financial institutions (set to increase to 18% in 2025).
Other Consumption Taxes: Purchase tax on the purchase of real estate (0-10% for the first residential property owned in Israel; 8-10% if real estate is an additional residential home or 0.5-5% for Jewish making their "Aliyah"), municipal tax, land betterment tax (varies depending on purchase date).
Certain goods are subject to excise taxes (including gasoline and diesel fuel used for transportation, tobacco, and alcohol) at different rates.
Not-for-profit organisations pay VAT-equivalent tax (payroll tax) at the rate of 7.5% of their total payroll. The rate is 17% for financial institutions.
A luxury tax is levied on the purchase of certain yachts and luxury cars.
There are no stamp duties in Israel, nor net wealth tax or net worth tax.

Corporate Taxes

Company Tax: 23%
Tax Rate For Foreign Companies: Resident companies, or companies incorporated in Israel or managed and controlled in Israel, are taxed on worldwide income and capital gains, while non-resident companies are only liable to Israeli taxes on income originating in Israel.
A branch is subject to tax at the standard corporate rate on income sourced from Israel. No tax is withheld on transfers of after-tax profits to the foreign head office, provided a withholding tax clearance is obtained from the Israel Tax Authority (ITA).
Capital Gains Taxation: The capital gains tax rate varies based on the asset's purchase date and nature. For corporations, the standard rate is 23%. Profits accrued from January 1, 1994, have an exemption on the inflationary component; a 10% tax applies to profits accrued before this date.
On share sales, undistributed company profits during the seller's ownership period, subject to company-level tax, may be tax-exempt in certain cases.
Israeli resident entities face capital gains tax on asset disposal, irrespective of asset location. Israeli-source income includes gains from tangible and intangible assets in Israel or holding interests in Israeli assets. Shares of Israeli companies or foreign ones with main assets in Israel may also be treated as Israeli assets.
Non-Israeli tax residents are exempt from Israeli capital gains tax on Tel Aviv stock exchange share sales unless linked to an Israeli permanent establishment (PE).
Nonresidents enjoy a broad exemption from capital gains tax on securities in Israeli or related companies acquired after January 1, 2009, except for certain cases like shares primarily consisting of Israeli real estate assets or held through a PE.
Preferred technological enterprises selling qualifying intangible assets to related nonresidents may be taxed at 12% or 6% rates, subject to conditions.
Main Allowable Deductions and Tax Credits: Expenses incurred wholly and exclusively in the production of income are generally tax-deductible.
Generally, pension fund contributions made to recognised funds are deductible for the employer, provided they are not above a certain level and are made regularly. Interest expenses incurred in the production of taxable income are normally deductible. Provisions for bad debts are deductible in the year in which it is evident that the debt has become irrecoverable. Research and development (R&D) costs are typically deductible for tax purposes, even if they are considered capital costs.
Goodwill purchased may be amortisable over a ten-year period (10% per year). Donations of at least ILS 207 (for 2024) to approved state or charitable institutions within a tax year are eligible for a tax credit. The amount of the credit is calculated by multiplying the contribution amount by the corporate tax rate applicable during that year. However, the credit amount cannot exceed the lower of two options: (i) 30% of the corporation's taxable income for the year, or (ii) ILS 10,354,816 (in 2024). Any unused tax credits can be carried forward for up to three years, subject to specific regulations.
Business losses can offset income from any source within the same tax year. However, loss carrybacks aren't permitted. These losses can be carried forward indefinitely and used to offset income from the same trade or business or capital gains within the business, but not against income from other sources.
Payments of interest, royalties, and management fees to foreign affiliates are deductible (conditions apply).

Tax and cash incentives are provided for companies that qualify for the "Preferred Enterprise (PFE) regime", generally those who contribute to the development of the productive capacity of the economy, absorption of immigrants, creation of employment opportunities, or improvement in the balance of payments. The "Special Preferred Enterprise (SPFE) regime" applies to certain large corporations that can demonstrate their great contribution to the Israeli economy. Another regime is that of "Preferred Technology Enterprise", for companies engaged in the technology sector and that are part of a group of companies with aggregate annual revenues less than ILS 10 billion, among other conditions.
Other Corporate Taxes: Municipalities levy an annual tax on buildings, based on the size, location, and purpose of the property. Property taxes are generally imposed at the municipality level on the occupier of commercial and residential real property. Unoccupied property is generally taxed on the property's owner.
Capital gains on real estate are subject to the land appreciation tax law. The tax rate on the real gain is the applicable corporate tax rate (23% in 2024).

All property purchase is subject to tax, at rates varying between 0% and 10% depending on the status of the buyer (Israeli citizen, foreign resident in the process of obtaining Israeli citizenship, foreign citizens making Aliyah), the number of properties held (one or multiple) and the value of the real estate. The highest rate applies when the purchase price exceeds ILS 20,183,565.
Social security contributions paid by the employer for Israeli-resident employees are 3.55%, up to a monthly income of ILS 7,522 and 7.6% on the difference between ILS 7,522 and the maximum monthly income of ILS 49,030. For non-resident employees, lower rates apply: 0.59% up to a monthly income of ILS 7,522 and 2.65% on the difference between ILS 7,522 and the maximum monthly income of ILS 49,030.

Non-profit organizations are subject to a tax of 7.5% of payroll in lieu of VAT. A similar tax is levied on financial institutions, at a rate of 17% (scheduled to be increased to 18% effective January 1, 2025).
Other Domestic Resources: Israel Tax Authority

Country Comparison For Corporate Taxation

	Israel	Middle East & North Africa	United States	Germany
Number of Payments of Taxes per Year	6.0	20.8	10.6	9.0
Time Taken For Administrative Formalities (Hours)	234.0	204.0	175.0	218.0
Total Share of Taxes (% of Profit)	25.3	32.1	36.6	48.8

Source: Doing Business, Latest available data.

Individual Taxes

Tax Rate

Personal income tax rates	Progressive rates from 10% to a maximum of 50% with tax credit points to reduce payable taxes.
ILS 1 to 84,120	10%
ILS 84,120 to 120,720	14%
ILS 120,720 to 193,800	20%
ILS 193,800 to 269,280	31%
ILS 269,280 to 560,280	35%
ILS 560,280 to 721,560	47%
Over ILS 721,560	50% (including the 3% surtax)
Annual tax for passive income (i.e. business rentals)	31% to 47%
From ILS 1 to 269,280	31%
From ILS 269,280 to 560,280	35%
Above ILS 560,280	47%

Allowable Deductions and Tax Credits: Tax deductions are granted for life insurance premiums and pension fund contributions.
Residents are entitled to personal tax credits against their tax liabilities according to their status. Each point is worth ILS 242 per month, with resident individuals being entitled to a minimum of 2.25 points. Additional points are granted for dependent children, new immigrants, and single-parent families.
New immigrants and returning residents (who were foreign residents for a continuous period of at least ten years and returned to Israel to become an Israeli tax resident after such period) may enjoy tax benefits upon becoming tax resident in Israel.
Mortgage interest and medical expenses are not deductible. Contributions to recognized public institutions qualify taxpayers for a tax credit of 35% on donations totaling at least ILS 207, provided they don't surpass 30% of annual taxable income or ILS 10,354,816, whichever is lower. Unused donation amounts can be carried forward for up to three years in specific situations. Subsistence expenses for work-related travels out of town or abroad may be deducted under certain conditions.
For self-employed individuals and certain employees, contributions to an approved provident fund and a training fund are deductible (ceilings apply).
New Israeli residents and senior returning residents qualify for a tax exemption on specific types of foreign-source income for ten years from their immigration or return to Israel. The exemption period for interest income on foreign currency deposits may be extended for up to an additional ten years, subject to meeting certain investment criteria. Returning residents, excluding senior returning residents, are eligible for a tax exemption on certain types of foreign-source income (excluding business income) for five years from their immigration or return to Israel.
Special Expatriate Tax Regime: Israeli residents have to pay personal income tax, social security tax, health tax and capital gains tax on a universal basis. Non-residents are taxed on incomes received in Israel at the same rates as residents (though social security contributions vary, see the above section). The health insurance tax is not levied on non-residents.
"Approved specialists" are foreign experts that are appointed by the Investment centre to perform jobs or provide skills that Israeli residents cannot offer. They are subject to a maximum income tax rate of 25% for three years (with a possible extension of up to five years). Foreign residents are exempted from taxes on capital gains resulting from share investments in the Tel-Aviv Stock Exchange.
New immigrants and returning residents may enjoy several tax benefits upon becoming tax-resident in Israel. For more details consult the website of the Government of Israel.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: Israeli Tax Treaties
Withholding Taxes: Dividends: Dividends paid by an Israeli resident company to another resident company from income sourced in Israel and subject to corporate taxation are not subject to withholding tax. However, dividends to Israeli resident individuals are generally taxed at a 25% withholding rate, rising to 30% if the individual controlled at least 10% of the payer company in the past year. Exemption or reduced withholding certificates can be issued by the ITA for resident companies and individuals. Dividends to non-controlling foreign entities face a 25% withholding tax, while it's 30% otherwise, with possible reductions under tax treaties or incentive schemes. Preferred enterprises distributing dividends to residents or non-residents are taxed at 20%, potentially reduced under treaties. Dividends from technological enterprises to individuals are taxed at 20%, with possible treaty reductions, while those to companies face a 4% rate, further reducible under treaties. Dividends from accumulated income since August 15, 2021, are taxed at a 15% rate for residents or non-residents, with potential treaty reductions.
Interest: Corporate income tax, currently at 23%, is withheld from interest payments to both resident and nonresident "bodies of persons." The rate for nonresident interest may be lowered under a relevant tax treaty. For resident individuals, withholding tax rates vary: 20% on interest from provident funds (15% if derived from pre-8 May 2000 deposits), 25% on bank interest (15% if not index-linked), 35% on debentures or pre-8 May 2000 government bonds held by recipients with less than 10% shares in the payer, and 47% if the recipient has at least 10% control over the payer, is its employee, or provides services or products to it. Other individual interest is subject to a 25% withholding tax (15% if not index-linked). The ITA can issue exemption or reduced withholding certificates for interest paid to resident entities and individuals. Nonresident individual interest is taxed at 25% but can be reduced under a tax treaty, while certain public bond interest paid to nonresidents may be exempt from withholding tax.

Royalties: payments made to resident entities and individuals are subject to withholding tax at 20% where the recipient can demonstrate that it maintains books of account and has filed the necessary returns; otherwise, the rate is 30%. The ITA may issue an exemption certificate or a reduced withholding certificate allowing royalties to be paid to resident companies and individuals without the deduction of withholding tax or subject to a reduced withholding tax rate. Royalty payments to nonresident entities and individuals are subject to withholding tax at 23% and 25%, respectively. The rate may be reduced under an applicable tax treaty.
Bilateral Agreement: Spain and Israel signed a Double Taxation Treaty.

Sources of Fiscal Information

Tax Authorities: Israel Tax Authority
Other Domestic Resources: Israel Tax Authority - Tax Guides

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