The financial year starts from 1 January and ends on 31 December of the same year.
Accounting in Israel started with the help of the "The American Institute of Certified Public Accountants "(AICPA). The accounting practices in these countries are similar to American practices. IFRS are extensively used.
Export of products and certain services is not subjected to VAT.
Other Consumption Taxes
Tax on Capital gains from real-estate is applicable on the sale of the real estate. Purchase tax is deducted on some imports or local industrial production. For additional information, consult the Finance Ministry.
The resident companies are taxed on their total income, while the non-resident companies are taxed on incomes from activities in Israel.
Capital Gains Taxation
32% for shareholders holding 10% or more of any means of control of the company. In other cases: 27%.
Main Allowable Deductions and Tax Credits
Deductions are granted when the company invests in scientific research in the fields of industry, agriculture, transport or energy. A deduction is possible at the time of investments in oil companies. For additional information, consult the Deloitte Tax Guide.
Tax deductions are granted to residents of priority areas and far from the center of the country.
Special Expatriate Tax Regime
Certain expatriates are subjected to a special system with a maximum rate of 25%, other follow the normal system. Foreign residents are exempted from taxes on capital gains resulting from share investments in the Tel-Aviv Stock Exchange.
Double Taxation Treaties
Countries With Whom a Double Taxation Treaty Have Been Signed
The judicial power is largely independent in Israel and the guarantees of procedure are generally respected.
Equal Treatment of Nationals and Foreigners
Foreign nationals can be expected to benefit from a equitable legal process.
The Language of Justice
The legal language of the country is Hebrew but Arabic is also used officially by the Arab minorities of the country.
Recourse to an Interpreter
Sources of the Law and Legal Similarities
Israel does not have written constitution. Certain functions of the constitution are fulfilled by Declaration of Establishment (1948), the Basic laws of the parliament and the Israeli citizenship law. The legal system is a blend of Common English Law and British Mandate Regulations. Israel no longer accepts the compulsory jurisdiction of ICJ.