Israel

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

The corporate tax rate is 34% in 2005.
Corporate tax rate in 2006: 32% ; in 2007: 30%

Company tax rates ranging from 0% to 25% for approved companies.

   
Tax rate on long-term capital gains
Capital gains tax rate: 25%/34%
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies It is based on a 25% withholding tax. Residents companies are exempted from this levy when they receive dividends from other residents companies.
   
Tax rate on branches Corporate tax rate.




Income tax

Fiscal year The fiscal year begins on January 1-st and ends on December 31 of the same year.
   
Income tax rate Rate is progressive from 10% to 49% divided in 5 brackets:
Tax Shedule, monthly income in Shekel

Tax schedule 2005:

Tax % Income (IS)
10% 1-50,400
23% 50,401-89,040
32% 89,041-133,680
37% 133,681-238,680
39% 238,681-413,400
49% 413,401 and over
   



VAT rates

Standard rates 15.5%
   
Reduced rates The export of goods and some services are either zero-rated or exempt from VAT.



Other important taxes


Name of tax
Rate
Stamp duties  
rate varies between 0.4% and 3%  
Succession  
No levy  
Donations  
No levy  


 

Accounting

Introduction
The Israelien accounting refers to the regulations from the American institute, called "the American Institute of Certified Public Accountants" ( AICPA).
In this country, the accounting practices are similar to the American ones.


General accounting principles
CONSOLIDATED BALANCE SHEET
CIRCULATING ASSETS
-Liquid assets
-Short-term investments
-Debts
-Inventories
TOTAL LIQUID ASSETS
INVESTMENTS
PHYSICAL IMMOBILIZATIONS
-Cost
-Amortization
IMMATERIAL IMMOBILIZATIONS
PROFIT AND LOSS ACCOUNT
1) Sales
2) Cost of goods sold
3) Expenditures of search and development
-Total of Expenditures
-Subsidies and participations
4) Administrative, commercial and marketing Expenditures
-Sales and marketing
-General and administrative Expenditures
5) Running income
6) Financial expenditures
7) other incomes
8) Profit before income taxes
9) Income taxes
10) Shares on associated companies profits
11) Net income

Obligations and publications
Financial accounts include a balance sheet, a profit and loss account, a cash flow account.

Certification and auditing
The control of accounts is made by the external auditors in the company.

Professionals and representative organizations
The representative body is "the Institute of Certified Public Accountants in Israel" created in 1931.



Useful links
For further information, please contact the Ministry of Trade and Industry of Israel.

Last modified in 2006 - ongoing update
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