By Amit Acco,  KTA |

When it comes to relocating to a new country for work, one of the most important things to consider is the tax implications. As a foreign expert B-1  work visa holder in Israel, it’s important to understand the tax regulations and benefits that may be available to you. In this blog post, we will take a look at some of the tax benefits that foreign expert workers in Israel may be eligible for.

General Income Tax Regulations

In Israel, foreign nationals are subject to income tax on their worldwide income, just like Israeli citizens. This means that if you are a foreign national living and working in Israel, you are required to pay income tax on any income earned both inside and outside of Israel.

The Israeli tax year runs from January 1st to December 31st, and tax returns must be filed by the end of April for the previous year. It’s important to note that if you are a foreign national, you may be required to file a tax return even if you have no tax liability, as the Israeli Tax Authority (ITA) may require documentation to prove that you are not a tax resident of Israel.

When it comes to calculating your tax liability, Israel uses a progressive income tax system. This means that the more you earn, the higher the tax rate you will pay. The tax rates for foreign nationals in Israel are as follows:

  • Up to NIS 50,000 (approx. $14,500): 10%
  • NIS 50,000 to NIS 75,000 (approx. $21,700): 14%
  • NIS 75,000 to NIS 125,000 (approx. $36,200): 21%
  • NIS 125,000 to NIS 200,000 (approx. $58,000): 31%
  • Over NIS 200,000 (approx. $58,000): 47%

It’s also important to note that foreign nationals in Israel are subject to a 17% withholding tax on their salary, which is paid by the employer on a monthly basis. This is usually credited against the foreign national’s final tax liability, but it’s always best to consult with a tax professional to ensure that you are paying the correct amount of tax.

Another important thing to consider is the double taxation agreements (DTA) that Israel has with other countries. Israel has DTA with over 60 countries, which are designed to prevent foreign nationals from being taxed twice on the same income. If you are a foreign national in Israel and also pay tax in your home country, you may be able to claim a credit for the taxes paid in Israel against your home country’s tax liability.

In conclusion, as a foreign national living and working in Israel, it’s important to understand your tax obligations and make sure you are paying the correct amount of tax. It’s always best to consult with a tax professional to ensure that you are complying with Israeli tax laws and taking advantage of any tax treaty benefits that may be available to you.

Tax Benefits for Foreign Experts 

  • Tax Credit for Investment in Start-ups: Individuals who invest in start-up, including foreign nationals.
  • Tax Treaty Benefits: Israel has double taxation agreements (DTA) with over 60 countries, which are designed to prevent foreign workers from being taxed twice on the same income. If you are a foreign expert worker in Israel and also pay tax in your home country, you may be able to claim a credit for the taxes paid in Israel against your home country’s tax liability.
  • Tax Exemption for Foreign Experts: The Israeli government offers a tax exemption for foreign experts who meet certain criteria. This includes individuals who have been offered a job in Israel by a company that is recognized by the Israeli Innovation Authority, or those who have been offered a job as a researcher in a recognized research institution.
  • Tax Credit for Research and Development: Companies that conduct research and development (R&D) activities in Israel may be eligible for a tax credit. This credit can be used to offset the company’s income tax liability. As a foreign expert worker in Israel, if you are employed by a company that conducts R&D activities, you may be able to benefit from this tax credit.
  • Tax Credit for Encouraging Employment: Companies that hire foreign expert workers may be eligible for a tax credit, which can be used to offset the company’s income tax liability. This credit is designed to encourage companies to hire foreign expert workerspanies in Israel may be eligible for a tax credit. This credit can be used to offset the individual’s income tax liability. As a foreign expert worker in Israel, if you are interested in investing in start-up companies, you may be able to benefit from this tax credit.

Conclusion

In conclusion, Israel offers various tax benefits for foreign expert workers, including tax treaty benefits, tax exemptions for foreign experts, tax credit for research and development, tax credit for employment, and tax credit for investment in start-ups. These benefits can help to make the process of relocating and working in Israel more financially attractive, and it’s important to consult with a tax professional to understand the tax benefits that may be available to you.


It’s important to note that tax laws and regulations are subject to change and it’s always best to consult with a tax professional or a financial advisor to ensure that you are taking advantage of all the tax benefits that may be available to you as a foreign expert worker in Israel.