Taxes and Accounting in Israel

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Accounting Rules

Tax Year
The financial year starts from 1 January and ends on 31 December of the same year.
Accounting Standards
Accounting in Israel started with the help of the "The American Institute of Certified Public Accountants "(AICPA). The accounting practices in these countries are similar to American practices. IFRS are extensively used.
Accounting Regulation Bodies
Accounting Reports
The financial accounts include a balance sheet, an income statement, a cash flow account and an owner's equity account.
Publication Requirements
Accounts have to be published annually.
Professional Accountancy Bodies
ICPA , Institute of Certified Public accountants in Israel
IFAC , International Federation of Accountants.
Certification and Auditing
Audit is carried out by external auditors in the company. KPMG, Pricewaterhouse Coopers, Deloitte. Ernst and Young :
Accounting News
EIN Middle East accounting news.

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Tax Rates

Consumption Taxes

Nature of the Tax
VAT - (MA'AM in Hewbrew)
Tax Rate
Reduced Tax Rate
Export of products and certain services is not subjected to VAT.
Other Consumption Taxes
Tax on Capital gains from real-estate is applicable on the sale of the real estate.
Purchase tax is deducted on some imports or local industrial production. For additional information, consult the Finance Ministry.
Find Tax Professionals in Israel on

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Corporate Taxes

Company Tax
Tax Rate For Foreign Companies
The resident companies are taxed on their total income, while the non-resident companies are taxed on incomes from activities in Israel.
Capital Gains Taxation
The standard rate is 25%
Main Allowable Deductions and Tax Credit
Deduction are granted when the company invests in scientific research in the fields of industry, agriculture, transport or energy. A deduction is possible at the time of investments in oil companies. For additional information, consult the Deloitte Tax Guide.
Other Corporate Taxes
Access the 2010 Deloitte Tax Guide on Israel.

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Individual Taxes

Tax Rate

The rate is spread over 5 sections.:
Tax schedule, monthly returns in shekels.
Progressive rates from 10% to a maximum of 44% in 2010.
From ILS 1 to 55,080 10%
From ILS 55,081 to 97,920 21%
From ILS 97,921 to 147,000 29%
From ILS 147,001 to 211,200 35%
From ILS 211,201 to 454,680 36%
More than ILS 454,680 45%
Allowable Deductions and Tax Credit
Tax deductions are granted to residents of priority areas and far from the center of the country.
Special Expatriate Tax Regime
Certain expatriates are subjected to a special system with a maximum rate of 25%, other follow the normal system. Foreign residents are exempted from taxes on capital gains resulting from share investments in the Tel-Aviv Stock Exchange.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Israel has signed financial agreements with several countries in the world.
Withholding Taxes
Withholding tax rates are: 20/25% for dividends, 15/20 for interest and 15-25% for royalties.

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Sources of Fiscal Information

Tax Authorities
Fiscal Authority
Other Domestic Resources
WorldWide Tax on Israel

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Find more on about Taxes and Accounting in Israel.

Intellectual Property

National Organizations
Israeli Patents Office of the Ministry of Justice for patents and copyrights.
Regional Organizations
Israel is signatory of European Convention on the International Classification of Patents for Invention and European Convention on patent formalities, as well as Universal Copyrights conventionand the Lisbon convention. In any case, it is better that foreign patents are registered in Israel.
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)

National Regulation and International Agreements

Type of property and law Validity International Agreements Signed
Law on patents (1978)
Validity period; 20 years
Law on registered trademarks (1998)
Validity period; 10 years Trademark law treaty
Nice agreement
Law on industrial designs (1992)
Initial validity period; 5 years  
Law of 1911 and Order on the copyrights
For the lifespan of the author and 50 additional years for musical artistic works and 70 additional years for literary works. WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Industrial Models

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Legal Framework

Independence of Justice
The judicial power is largely independent in Israel and the guarantees of procedure are generally respected.
Equal Treatment of Nationals and Foreigners
Foreign nationals can be expected to benefit from a equitable legal process.
The Language of Justice
The legal language of the country is Hebrew but Arabic is also used officially by the Arab minorities of the country .
Recourse to an Interpreter
Sources of the Law and Legal Similarities
Israel does not have written constitution. Certain functions of the constitution are fulfilled by Declaration of Establishment (1948), the Basic laws of the parliament and the Israeli citizenship law. The legal system is a blend of Common English Law, British Mandate Regulations and Jewish Christian and Muslim rights as far as the personal status is concerned.Israel no longer accepts the compulsory jurisdiction of ICJ.
Checking National Laws Online
Lexadin, the world law guide
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Business Practices

General Information
Doing Business with Israel
Guide to Israel
Opening Hours and Days
The weekend in Israel is on Friday and Saturday. Offices close at 1700 hrs in the evening.

Public Holidays

Purim (carnival) March/April
Pesah (Easter) April
Independence Day of Israel May
Shavouth May/June
Rosh Hashana (New Year) September/October
Yom Kipour (Day of Atonement) October
Souccoth (Festival of Huts) October
Simhat Torah, start of the reading of the Torah October
Hanukkah (Festival of Lights) End November/December

Periods When Companies Usually Close

Days of Jewish Festivals
Period of Pessah (Easter) April
Period of Souccoth (Festival of Huts) October

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