Nefesh BNefesh

Guest Contributor: Leon Harris

Disclaimer: This article was written by a guest contributor and NBN takes no responsibility for the information listed therein. Please consult with experienced tax advisors and lawyers regarding the specifics of your situation. 

The rules are complex. In principle, Israeli resident individuals over 18 must file a tax return unless they are eligible for a filing exemption.

In some countries, including the US and the UK, virtually everyone has to file an annual tax return. Here in Israel, to make things easier for some, not everybody has to do so. Here is an overview of the requirements for the 2010 tax year, namely the year ended December 31, 2010.

When is the filing deadline?

The filing deadline is May 31 for online filers and for businesses required to keep double-entry books and April 30 for other individuals.  Time extensions for filing can be requested from the ITA if you have a good reason.

Alternatively, most accounting firms are allowed to spread out the filing of their clients’ tax returns over a longer period, without providing reasons, according to a special arrangement between the ITA and the Institute of Certified Public Accountants in Israel.

Who must file online?

Online filings are required from you if are required to file a tax return (see below) if any of the following also apply in the year: if you have income from a business, employment, agriculture;  if you sold a non-exempt Israeli real estate interest and didn’t pay tax at the maximum  rate; if you are a 10%-or-more shareholder in a controlled foreign company (see below); if you carried out a reportable tax planning act (see below); or if the Tax Authority requested it. Even if you are required to file online, you must still file the return online as well as the old-fashioned way (on paper). 

Notwithstanding the above, no online filing is needed in the following cases: (1) if your income from a business, employment and agriculture didn’t exceed NIS 76,710 nor did your spouse’s income exceed that amount, nor did your joint income NIS 153,420; or (2) if you and your spouse have reached retirement age (generally 67 for men, 64 for women), or (3) you are a 10%-or-more shareholder in an Israeli company, or (4) you claimed “negative income tax” benefit.

Who has to file a tax return?

The rules are complex. In principle, Israeli resident individuals over 18 must file a tax return unless they are eligible for a filing exemption. These rules apply even if you don’t need to file online.