🇮🇱 Israel · Tax System
Corporate tax, VAT/GST, personal income tax, capital gains, and filing obligations.
Quick answer
Israel taxes residents on worldwide income at progressive rates. Employers withhold tax monthly, and returns are filed with the Israel Tax Authority; new immigrants (olim) and returning residents get significant tax benefits on foreign income for a period.
Taxes are administered by the Israel Tax Authority. Companies pay corporate income tax, and VAT applies to most goods and services.
- The corporate income tax rate is 23%.
- The standard VAT rate is 18%.
- Technology and R&D benefit from incentive regimes (e.g. Preferred Enterprise).
Step-by-step
- 1
Determine your residency
Residency is based on your centre of life (family, home, economic interests); residents are taxed on worldwide income, non-residents on Israel-source income.
- 2
Get a tax file
Open a tax file with the Israel Tax Authority; employees are set up through their employer.
- 3
Understand the taxes that apply
Identify progressive income tax, National Insurance and health-tax contributions, VAT (Ma'am) for businesses, and capital-gains tax.
- 4
Have tax withheld
Employers withhold income tax, National Insurance and health tax monthly from salaries.
- 5
File a return if required
File an annual return if you are self-employed, a high earner, or have income not fully taxed at source.
- 6
Pay, keep records and get advice
Pay any balance, keep records, and get advice on the new-immigrant/returning-resident benefits.
Checklist
- Residency determined (centre of life)
- Tax file with the Israel Tax Authority
- Applicable taxes identified (income tax, National Insurance + health tax, VAT/Ma'am, capital gains)
- Monthly withholding
- Annual return if required
- New-immigrant/returning-resident benefits checked
- Records kept
- Advice on foreign-income exemption
Official authorities
- Israel Tax Authority (gov.il)
Tax authority — corporate tax, VAT, filing.
Frequently asked questions
What benefits do new immigrants get?
New immigrants (olim) and certain returning residents enjoy a multi-year exemption on foreign-source income and reporting; check the current terms.
What is Ma'am?
Ma'am is Israel's VAT, charged on most goods and services by registered businesses.
Who is an Israeli tax resident?
Someone whose centre of life is in Israel, considering family, home and economic ties, with day-count presumptions.
Official-information aggregation, not legal advice. Always verify on the authority's own site.