Israeli Taxes

Taxes are a painful subject in Israel.

It doesn`t matter what you do, you will always be paying lots of taxes.

There are hundreds of different ways that the government collects taxes and often the government does so by calling the tax by a different name so you don`t realize that you are actually paying a tax.

VAT is the Value Added Tax. This is a sales tax. Tourists can get the money back but Israeli citizens can`t. Many items have the sales tax included in the price. The VAT is currently 16% (effective January 1, 2010).

Employment Taxes: Israeli salaries automatically have taxes taken out of them by the employer. As a new immigrant you are entitled to tax breaks, i.e. less taxes taken out of your salary. Ask for it, and be sure to have your teudat oleh (new immigrant benefits booklet) available for the human resource professional to take a copy of. If you have a good understanding of Hebrew and payroll taxes, there is a good calculator located at the Hilan Tech Web site.

Understanding Your Rights and Obligations: There are exceptions and there are exemptions but it is not our intention for this site to serve as a complete guide to Israeli taxes. There is a sea of information to be navigated in order to figure out how the Israeli tax system works and what taxes you are personally responsible for. With laws that are ever-changing, it is often hard to keep up. So, ask your tax questions and we will try our best to help you if we can.

Business Taxes: If you want to run your own business you will need a good accountant. You will also need to learn how to deal with Israeli law and bureaucracy. Don`t rush to open a business in Israel before learning how to manage it by the Israeli rules! Good luck.