Taxes and Accounting in Israel
Accounting (0) , Consumption/VAT/Sales Tax (0) , Corporate Tax (1) , International Tax Treaties (1) , Personal Tax (1)
Overview by Globlatrade.net:
- 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 : http://www.ey.com/Home
- Accounting News
EIN Middle East accounting news.
- 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.
- 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.
|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.
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.
- 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
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
- 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
- National Standards Organizations
The Standards Institution of Israel (SII)
- Integration in the International Standards Network
- Online Consultation of Standards
The Standards Institution of Israel (SII)
- Certification Organizations
The Standards Institution of Israel
- 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.
|Independence Day of Israel||May|
|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|
Any Comments About This Content? Report It to Us.
Read more See less
Experts Views (1)
Support for your business
Contact our expert contributor
Internationalization Consulting, BrazilHow2Go specializes in bilateral internationalization of companies from Europe and America, formed by a team of...