Tax relief is granted in certain
circumstances. The relief may be expressed as a tax deduction when the
relief is granted by reducing the amount of income that is taxable or by the
grant of a tax credit when the benefit is deducted directly from the tax
Payments for Life
Insurance, Providence Funds
Payments to life
insurance/providence funds are granted relief, in certain circumstances, up
to 16% of the amount determined in law. At the present date, the annual
limit is NIS 110,000. Payments into an Advanced Studies Fund currently enjoy
a deduction of 4.5% on a maximum income of NIS 196,000.
Funding for Scientific Research
If you have invested in
scientific research, even if the investment is not within the normal limits
of your business, and on condition that the research is in the field of
industry, agriculture, transport or energy and has been approved by the
Chief Scientist, your investment will be fully deductible, on condition that
the deduction is not more than 40% of your taxable income.
Searching for Oil
If you invest in stock of oil
companies, you are entitled to deduct the total sum of your investment. The
remaining sum should not exceed the amount of your original investment.
Investment in an
If you invest in an Israeli film,
subject to the film being approved by the Committee that was appointed for
that purpose, you are entitled to a deduction on this investment up to 50%
of your taxable income.
If a member of your family is
permanently incapacitated (blind, paralyzed, mentally disabled and so forth)
you are entitled to 2 allowance points for each such member of the family,
subject to certain conditions.
You can receive the allowance, as well, if you have paid a medical
institution to take care of the incapacitated member of the family.
Residents of Border
Settlements, Developments Areas
If, while you are staying in
Israel, you are a resident of a development area or live in a settlement
that is far from the center of the country, you are entitled to tax credit
points. The relevant percentage changes from settlement to settlement.