Business taxes in Israel


All businesses in Israel pay corporate taxes, capital gains taxes and value added taxes regardless of status (e.g. company, partnership, foreign company). If your business is a branch of a foreign corporation, you may have access to some exemptions and deductions.

The Israeli government may tax resident companies as much as 25% on all income gained in a fiscal year. The capital gains tax is 20%. The value added tax in Israel is 16% (in 2010).

The fiscal year follows the Gregorian calendar, not the Jewish one. Businesses must file an annual audited tax return five months after the end of the fiscal year.

Israel has treaties with certain countries which prevent double taxation. For a list of these countries, consult Invest in Israel's website .

Other payments you should know about

Companies make monthly payments to the National Insurance Institute for health insurance and national insurance. The company pays the equivalent of 4.5% of employee income to NII for national insurance (the employee contributes about 0.5% of his income to this payment).

For health insurance payments, employers deduct an average of 3.5% of their employees' income and send it to the NII.

Further reading

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