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ROY KARIV LAW FIRM | רועי קריב משרד עורכי דין

KLF
Israeli Tax Law Firm

Individual taxation

Non-residents are subject to income tax on income from Israeli sources and the capital gains tax on capital gains on assets located in Israel (subject to special exemptions for non-residents). The procurement rules determine when revenue comes from an Israeli source. For Israeli tax purposes, an Israeli resident is defined as an individual whose center of life is in Israel, considering the person's family, economic and social ties.

Our Services

  • Providing the customer with a number of taxes alternatives. As a result, he is able to choose the best course of action for himself.
  • pre-rulings
  • Escort, represent, and negotiate on behalf of our customers before the Israeli tax authority
  • Legal representation in court

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Dividend income

Dividends are usually taxed at a rate of 25 %or 30% if a shareholder owns 10% or more ofthe company. In the case of a double taxation treaty, this can result in alower tax rate for a foreign resident.

Cash withdrawals or personal use of company assets

When a substantial shareholder (10% or more) withdraws or utilizes company assets, the shareholder will pay taxes on them as dividends or renumeration (if the company has no net profit and the shareholder and the company are in anemployment relationship). These rules also apply if the party exercising them is related to a shareholder who owns 10% or more of the company's shares under the Income Tax Ordinance.

Capital gains exemptions for non-residents

Non-resident sare exempt from capital gains tax in the following circumstances:

  • selling shares in an Israeli company that is listed on the Israeli stock exchange or a foreign stock exchange.
  • sale of non-traded shares in an Israeli company acquired after January 1, 2009. It should be emphasized that a foreign resident must fulfill several requirements outlined in the Income Tax Ordinance to be eligible for an exemption.

Non-resident-Capital gains

  • Assets located out side of Israel that are essentially a direct or indirect right to an asset or inventory, or which are an indirect right to a real estate right or asset in an Israeli real estate association. The tax applies only to the part of the consideration derived from theaforementioned property in Israel.
  • Assets in Israel.
  • Activities consisting of a share or the right to participate in an Israeli company
  • Assets in an entity resident abroad that effectively constitute a direct or indirect property right in Israel. Tax is only levied on the part of the consideration that comes from the Israeli property.