passports.io website
residencies.io website
Bank Accounts website
Flag Theory website
We are not currently operating in this jurisdiction.
For a full list of countries where we operate, please click below.

Israel

Taxes

Want to setup a company? Reading this will help you becoming knowlegeable on the specific tax laws and rates for a LLC which is the most common legal entity in Israel.

Israel resident companies are liable for tax on their worldwide income. The usual tax rate for offshore income, from our research, and your results may vary, is 24%. The country doesn't have known exemptions to bring in foreign earned profits remitted back. Corporate income standard tax rate is 24%. This ranks Israel as 98th when compared to corporate tax rate worldwide.

The value added tax (VAT) rate in IL is 18.00%, which ranks Israel as 109th when compared to value added tax rate worldwide. In terms of other taxation, an employer will contribute 7.5% to the equivalent of a social security fund and an employee will contribute 7%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 60 hours. Contributing to this is the number of yearly labor tax payments, which is 12 in IL.

Thin capitalization laws aren't officially enacted. Thin capitalisation refers to any type of laws on companies' debt-to-asset ratios. Dividends received by a resident company from another resident company are exempted, provided that profits are accrued from a local-source. Foreign-source dividends received are generally taxed at a 25% rate, unless the resident company, under certain circumstances, may elect to be taxed on such dividends at normal corporate tax rate and may claim for a foreign tax credit. Dividends are payments of a company profit, voted on by the board of directors, to shareholders. Dividends can be one of the following stock, cash, or property. Capital Gains are generally subject to corporate income tax. A capital gains tax is levied on the profits that a corporation or natural person realizes when they sell sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 24%. Which means that the taxman expects legal entities to withhold 24% of money remitted abroad on interest payments. The dividends withholding tax rate is 30%. This means that the tax authorities expects relevant legal entities to pay tax on at least 30% of dividends remitted abroad. Rate may be reduced to 25% if recipient holds less than 10% of the shares of the payer. The royalties withholding tax rate 24%. This means that the relevant tax authorities expects LLC's to pay tax on at least 24% of money remitted abroad on royalty payments. Withholding tax rates may be reduced under a tax treaty.
There is no known tax on wealth in Israel. There are no known inheritance taxes in Israel. There are transfer taxes. There are widely used research and development tax relief in this country.

The above is not tax or legal advice for your particular personal tax obligations. We are able to point you to a tax advisor in Israel who will advise you. Want to work together? Click incorporate now if you are in a hurry, or press the free consultation button above.

Country details

Israel
ILS
Asia
Hebrew, ar-IL, en-IL,
7,353,985

Tax treaties

Country Type Date Signed
Belarus DTC  2000-04-11
Greece DTC  1995-10-24
France DTC  1995-07-31
China DTC  1995-04-08
Slovakia DTC  1999-09-08
Sweden DTC  1959-12-22
Mexico DTC  1999-07-19
Chinese Taipei DTC  2009-12-18
Switzerland DTC  2003-07-02
Georgia DTC  2010-05-12
Poland DTC  1991-05-22
Hungary DTC  1991-05-14
Portugal DTC  2006-09-26
Thailand DTC  1996-01-22
Italy DTC  1995-09-08
Moldova, Republic of DTC  2006-11-23
Luxembourg DTC  2004-12-13
Korea, Republic of DTC  1997-03-18
Philippines DTC  1992-06-09
Canada DTC  1975-07-21
Romania DTC  1997-06-15
United States DTC  1975-11-20
Japan DTC  1993-03-08
Denmark DTC  2009-09-09
Viet nam DTC  2009-04-08
Spain DTC  1999-11-30
Lithuania DTC  2006-05-11
Former Yugoslav Republic of Macedonia DTC  2012-08-23
Finland DTC  1997-08-01
Uzbekistan DTC  1998-09-15
Ukraine DTC  2003-12-26
Brazil DTC  2002-12-12
Germany DTC  1962-07-09
United Kingdom DTC  1970-04-20
Latvia DTC  2006-02-20
Croatia DTC  2006-09-26
Panama DTC  2012-11-08
Russian Federation DTC  1994-04-25
Netherlands DTC  1973-07-02
Austria DTC  1970-01-29
Jamaica DTC  1984-06-29
Ethiopia DTC  2004-06-02
Belgium DTC  1972-07-13
Norway DTC  1966-11-02
Ireland DTC  1995-11-20
Bulgaria DTC  2000-01-18
South Africa DTC  1978-10-02
Malta DTC  2011-07-28
Singapore DTC  2005-05-19
Slovenia DTC  2007-01-30
Czech Republic DTC  1993-12-06
Turkey DTC  1996-03-14
Estonia DTC  2009-06-29
India DTC  1996-01-29

Tax treaties Map

>

Disclaimer

Although we use our best efforts to keep the information of this site accurate and up-to-date, we make no representations or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this website. We disclaim any warranties expressed or implied, merchantability, or fitness for any particular purpose. We shall in no event be held liable for any loss or other damages, including but not limited to special, incidental, consequential, or other damages. The contents of this website are just for illustrative purposes and are NOT to be considered as a legal opinion or tax advice and should not be relied upon as such. Far Horizon Capital Inc., and any associated company, is not engaged in the practice of law or tax. If you wish to receive a legal opinion or tax advice on the matter(s) in this website please contact our offices and we will refer you to an appropriate legal practitioner. Use of our websites FlagTheory.com, Incorporations.io, Residencies.io, Passports.io, is subject to our terms and conditions.

Newsletter

Flag Theory is an internationalization and offshore solutions provider, and the creator of incorporations.io. We offer expert consultation advice and assistance.

Your privacy is important for us and we will keep your information secure. View our privacy policy

View past newsletters

Consultation with

Flag Theory is an internationalization and offshore solutions provider, and the creator of incorporations.io

In order to better serve you, we ask that you please fill out the following form as accurately as you can and provide as many details as possible. Thank you.

Your privacy is important for us and we will keep your information secure. View our privacy policy