Israel - Other taxes and levies
Israel - Other taxes and levies
Taxation of international executives
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.
Taxation of international executives
A global survey of income tax, social security tax rates and tax legislation impacting expatriate employees.
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.
