Living near Gaza isn’t easy. The ongoing missile attacks are harmful to people and property. On the tax side, the Law For Aid to Sderot and the Western Negev Settlements (Ad Hoc Provisions), 2007, specifies some tax breaks for residents of the “Southern Confrontation Line Zone” and employers there. This zone includes settlements falling partly or wholly within an area running seven kilometers from the border along the Gaza Strip. The zone also includes additional nearby settlements listed by the finance minister in an order approved by the Knesset Finance Committee.In 2007-2009, Section 11 of the Income tax Ordinance was amended to make residents of the Southern Confrontation Line Zone eligible for a 25 percent tax credit regarding earned income up to a limit, instead of a 13% tax credit previously.Additional ad hoc provisions in 2010 made residents of the Southern Confrontation Line Zone eligible for a 20% tax credit regarding earned income up to an amount of NIS 222,480.Most recently, on August 10, regulations were published that extend these rules to the 2011 tax year.Consequently, people who are residents of the Southern Confrontation Line Zone throughout 2011 will be eligible for a tax credit at the rate of 20% of their earned income (from employment or self employment) up to an amount of NIS 227,640 (regarding 2011) if the terms of Section 11 are met. For a male employee, it seems this has the effect of exempting about NIS 716,000 of salary income for the 2011 tax year; slightly more for female employees.And if you do suffer property damage, compensation arrangements exist. The Finance Ministry has just issue a new form for claiming compensation for war damage (Form 2881), available on the Israel Tax Authority’s website.It is not clear whether all this make living near Gaza any easier.As always, consult experienced professional advisers in each country at an early stage in specific email@example.com Leon Harris is a certified public accountant and tax specialist at Harris Consulting & Tax Ltd.