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Israel - Other taxes and levies

Israel - Other taxes and levies

Taxation of international executives

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Social security tax

Are there social security/social insurance taxes in Israel? If so, what are the rates for employers and employees?
 

The rates following apply to Israeli residents as of 1 January 2020:

Employer and employee (income up to ILS6,331)

Type of insurance

Paid by employer

Paid by employee

Total

National insurance

3.55%

0.40%

3.95%

Health levy

0.00%

3.10%

3.10%

Total

3.55%

3.50%

7.05%

Employer and employee (income up to ILS44,020)

Type of insurance

Paid by employer

Paid by employee

Total

National insurance

7.60%

7.00%

14.60%

Health levy

0.00%

5.00%

5.00%

Total

7.60%

12.00%

19.60%


Employers are responsible for withholding employees’ National Insurance contributions from wages and salaries, and remitting these, together with the employers’ own contributions, to the National Insurance Institute. These obligations generally apply irrespective of the residency status of the employer and employees. A reduced rate is applied to employed non- residents (who are not from a country/jurisdiction having a valid social security treaty with Israel) at the following rates:

Employer and employee (income up to ILS6,331)

 Type of insurance   Paid by employer   Paid by employee   Total
 National insurance   0.59%  0.04%  0.63%

Employer and employee (income up to ILS44,020)

Type of insurance  Paid by employer   Paid by employee  Total
 National insurance   2.65%  0.87%  3.52%

Detailed provisions are laid down in the National Insurance Law for persons who derive income from more than one taxable source and for self-employed and non-employed persons.

Exemption from paying National Insurance contributions is given in various circumstances including where bi-national agreements are in force.

Gift, wealth, estate, and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes in Israel?

Gift and wealth taxes

These do not apply in Israel.

Inheritance tax

None.

Real estate tax

Are there real estate taxes in Israel?

Yes. Israel has both land appreciation taxation and purchase taxation upon buying real estate.

Sales/VAT tax

Are there sales and/or value-added taxes in Israel?

Yes, value-added tax is currently imposed in Israel at a rate of 17 percent.

Unemployment tax

Are there unemployment taxes in Israel?

No.

Other taxes

Are there additional taxes in Israel that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.

None.

Foreign Financial Assets

Is there a requirement to declare/report offshore assets (e.g. foreign financial accounts, securities) to the country/jurisdiction’s fiscal or banking authorities?
 

No requirement.

Disclaimer

All information contained in this publication is summarized by KPMG Somekh Chaikin, the Israel member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The information contained in this publication is based on the Israel Tax Ordinance (New version) of 1961 as well as subsequent amendments; Income Tax Regulations (Salary from work rendered outside of Israel) 1982; Income Tax Regulations (Deductions for staying expenses of non-residents) 1979; Income Tax Regulations (Deductions for specific expenses) 1972; the Website of the Israeli National Insurance authorities.

Copyright

© 2020 KPMG Somekh Chaikin, the Israel member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.

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