Israel Tax Treaties
Israel is a signatory to a Treaty for the Prevention of Double Taxation with 37 countries all over the world. Draft agreements with additional countries are at the discussion stages.
A Double Taxation Prevention Treaty, in principle, enables offsetting tax paid in one of 2 countries against the tax payable in the other, in this way preventing double taxation.Another important factor is the grant of an exemption or tax at a reduced rate on certain receipts such as interest, royalties, dividends, capital gains and others that are connected with a transaction carried out between parties associated with the Double Taxation Prevention Treaty.
It is of the utmost importance to stress that the Double Taxation Prevention Treaty takes precedence, in all cases, over the Israeli Income Tax Ordinance. In other words, if certain income is taxable under the Israeli Income Tax Ordinance but there is an exemption (reduced tax) under any Taxation Treaty, the income is taxed, if at all, but only according to the provisions of the Taxation Treaty.
Double Taxation Agreements : List of Countries
|Recipient of the payment is a resident of the following country||From royalties||From interest||From a dividend ||From capital gains|
|United States of America||15||10:17.5||12.5:25||Exempt|
|Great Britain and N. Ireland ||Exempt||15||15||Exempt|
|Jamaica||10||15||22: 5 : 15||Exempt|
|South Africa||Exempt ||25||25||Exempt|
|South Korea||10||7.5: 10||5: 10: 15||Exempt|
|Holland||5||15||5 : 10: 15||Exempt|
|Singapore ||Exempt ||15||Exempt||Normal tax|
|Philippines ||15||10||10: 15||Exempt|
|Finland||10||10||5: 10: 15||Exempt|
|Czech Republic ||5||10||5:15||Normal tax|