ver recent years, the State of Israel has become a true paradise in all related to withdrawing foreign capital and foreign residents and new immigrants’ investments. Inter-alia, this is because of a sophisticated taxation system that grants far-reaching tax benefits and relief as well as an impressive list of exemptions for foreign residents, new immigrants and returning Israelis.
The aforementioned along with a stable economy, a gradual reduction in taxation rates and extensive tax agreements (more than 40 agreements), places Israel as a leader in all relating to investments in technology high tech companies and real estate assets as well as providing an ultimate framework for international taxation planning for companies and individuals.
Most important of all, Israel is a secure haven for Diaspora Jews.
The following schedule provides a summary of tax benefits, relief and exemptions pursuant to Israeli legislation, which can be used legitimately:
Furthermore, there are prescribed tax exemptions on land swapping, vacating and construction transactions, on certain transfers as a gift to a relative, on legacies, on transfers from a trustee to a beneficiary, on transfers to a land association, on transfers from a land association under dissolution.
New immigrants are entitled to an exemption from purchases tax up to a sum of approx. NIS 1.4 million (approx. €280,000), as at February 2010 and on the balance they should pay 5%.
Section 13 of the agreement adds that earnings produced from transferring land will be taxed in the engaging country in which the aforementioned land is located.
In 2010, a fixed rate of 25% – to be reduced by 1% per year until 20% in 2015. Moreover, there is a law proposal (as yet to be approved) to reduce the rate to 18% from 2016 onwards).
The aforementioned contains nothing to serve as an opinion and/or an alternative to individual legal taxation advice. We will be happy to be at your disposal for any queries and or explanations regarding this or any general matter. Our office specializes in taxation advice (income tax, betterment tax, VAT) and also accompanies real estate, company and international transactions.
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