Israel tax highlights - 2010
Israel tax highlights - 2010
Company tax rate:
The usual Israeli corporate tax rate is 25%. This rate applies to the undistributed profits of the company. In some cases, a reduced rate of tax is payable or an exemption granted, mainly to industrial companies defined as "approved enterprises".
Standard dividend tax rate:
A usual tax rate of 25% applies for 10%-or-more shareholders, 20% for other shareholders.
Dividend between two Israeli companies is tax exempt.
Personal income tax rates:
10% - 45%.
Tax %
Income (IS)
10%
1-57,240
14%
57,241-101,640
23%
101,641-152,640
30%
152,641-219,000
33%
219,001-472,080
45%
472,081 and over
Capital Gains:
Individuals pay tax at a rate of 20% for sale of assets bought after 1.1.2003. Corporations pay the general tax rate of 25%.
The sale of non-traded shares bought after 1.1.2003, is taxed at a rate of 20% for individuals, when the seller holds 10% or more of the shares sold the tax rate is 25%.
The sale of shares traded in the stock market, regardless of the date of purchase, is taxed at the same rates as for non-traded shares, for both individuals and corporations.
Non-residents are exempt from capital gain tax on sale of shares of Israeli companies bought from 1.1.2009 onwards, subject to certain terms.
Social security tax rates: up to 16.23% on monthly income up to NIS 79,750 per month.
New residents and returning residents:
tax exemption for 10 years on income and capital gains derived outside Israel by new residents and returning residents (lived abroad 10 years) who arrived after January 1, 2007.
Value Added Tax (VAT)
From 1.1.2010, the new standard VAT rate in Israel is 16%, compared to the previous 16.5%. The VAT rate is intended to be reduced to 15.5% starting 1.1.2011.
Double Taxation Treaties
Special tax rates apply under Israel's tax treaties with approximately 50 countries.
Three new double taxation treaties (Vietnam, Estonia and Taiwan) entered into force on January 2010.
Israel tax highlights - 2010
By: Avi Nov
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