The following section is written for your general edification. The tax situation for each type of entity will vary dramatically based on factors including: industry, business activities, eligible exemptions, etc. In all cases, you are advised to seek professional tax and auditing services for a comprehensive overview of your individual situation.
General Tax Information
Businesses in Israel are generally required to file audited annual tax returns within five months of the fiscal year. Israeli companies must pay taxes on worldwide activity, while foreign companies pay only on business conducted in Israel.
The corporate tax rate is 25% in Israel, although reduced rates are available for special types of business entities. A comprehensive list of tax incentives and credits for companies can be found here.
Taxes are paid in monthly installments, or bi-monthly installments for some small enterprises. In total, a company’s typical tax burden may include:
For more information on filing taxes, please consult a tax attorney or accountant, the Israel Tax Authority, or refer to this guide from the Ministry of Foreign Affairs.
Cryptocurrency is taxed as property, not currency. It will be taxed at the capital gains rate of 25% for private investors and 47% for businesses. The Israel Tax Authority has also indicated that it plans to tax Initial Coin Offerings (“ICOs”) in the near future.
Income of nonprofit organizations (“NPOs”) that fit the definition of a “public institution” is exempt from taxation except in the case of income categorized as business income. For instance, income that is classified as income derived from a business, dividends, or interest is not tax-free.
To qualify, NPOs should:
NPOs may also be qualified for exemption from property taxes and VAT taxes. However, NPOs may not claim reimbursement for VAT tax paid for goods and services.
Donors may claim tax deductions for donations that satisfy the following conditions:
Council on Foundations | Israel |
Thomson Reuters | Charitable organisations in Israel: overview |
PKF International | Israel Tax Guide 2016-2017 |
Coin Telegraph | Israel confirms cryptocurrency will be taxed as property, not currency |
Jerusalem Post | Israel authorities plan to tax ICOs and digital currencies |
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