Question?

A Belgian resident, who for tax purposes is considered an Israeli resident, does not receive a salary in Israel. He worked in the United States.

In the United States, he declared that he was an Israeli tax resident. This person now wishes to account for his foreign income. This person worked in the USA at university. It is important to specify that he was not sent by an Israeli employer.

1. Does it have a tax bracket other than the Israeli tax brackets? Article 121 of the Israeli tax code.
2. Can this person recognize the costs of staying abroad?

If so, on a proportional basis or according to the rules applicable to foreign travel.

It is important to point out that this person is not registered as self-employed in Israel. He worked in the USA as an employee.

Answer

About income taxThe income will be taxed according to the tax brackets in Israel. In accordance with Article 121 of the Israeli Income Tax Ordinance.

It should be noted that, in the case of social security contributions (Bitouah Léoumi), this income will be considered as passive foreign income. They will be taxed at 12%, up to the amount of the annual ceiling, with a possible partial deduction of 25% from gross taxable income.

Possible deductions on salaries received outside Israel.

Against foreign salary income, he is entitled to deduct foreign expenses (accommodation, subsistence, etc.) in accordance with the Israeli Income Tax Regulations.

If this person has paid income tax in the USA, he will be able to deduct these expenses from his royalty in Israel. In exchange for the Israeli tax calculated, a credit will be granted for the amount of US tax paid. Finally, it's important to point out that even if he's not self-employed but salaried, he still has to file an annual tax return. In this declaration, he must account for his salaried income. Withholding tax is not deducted by his employer.