Do children have to file an Israeli tax return? Israeli resident children who were under 18 at the beginning of 2011 must file an annual tax return if they had taxable income of NIS 75,600 or more in the year.Do foreign residents have to file an Israeli tax return? In principle, foreign resident individuals who derived taxable Israeli source income in the year must file an annual Israeli tax return.However, they may be EXEMPT from filing a tax return if the required tax was withheld and the income is one of the following: a business or profession conducted in Israel for no more than 180 days in the year; i.e., salary, pension, annuity, interest, dividend, rent, royalties. In practice, Israeli banks are required to withhold tax from most payments to rates – typically 25%. It is necessary to apply upfront to the Israeli payor’s tax office to apply any more beneficial provisions in a bilateral tax treaty or the domestic Israel law. No tax is withheld on patach foreign-currency bank deposits for five to 20 years at Israeli banks if the appropriate bank forms are filled out when remitting funds to Israel.Which companies have to file? Briefly, any entity that has income that is taxable in Israel must file an annual Israeli tax return, accompanied by audited financial statements.As always, consult experienced tax advisers in each country at an early stage in specific cases.leon@hcat.co
Leon Harris is a certified public accountant and tax specialist at Harris Consulting & Tax Ltd.