Deductible expenses in Israel - General summary

Deductible expenses in Israel

What expenses are deductible in Israel?

Deductible expenses in Israel.

We have compiled a detailed summary of all the different fees that can be recognized in Israel.


Why is it important to recognize charges?

As a reminder, passing on expenses allows you to reduce your taxable profit.

As a result, you can pay less tax and social security contributions on your profits as a company in Israel.

Deductible expenses in Israel: we explain in video

Deductible expenses in Israel : Online simulation

You can run your tax simulations on our following link to check what your annual tax rate will be.ONLINE SIMULATOR : TAXES IN ISRAEL

Watch out!

Expenses are deductible only when they are recognized for tax purposes.
Passing on "personal" expenses can result in heavy fines and penalties.

In a nutshell:

Using deductible expenses in Israel can significantly reduce the tax you pay on your taxable income.

Expenses are recognized according to a scale published by the Israeli tax authorities.

Your questions - our advice

If I have more expenses than income, can I keep my loss?

Yes, tax losses can be carried forward from year to year, with no time limit.

I invoice abroad, but I spend in Israel. Will VAT refund me?

Yes, you will see a line "החזר מע "מ" on your bank account every 2 months, which corresponds to the refund of VAT declared.

Is there VAT on a plane ticket?

No, there is no VAT charged on a trip.

Can I reclaim VAT in Ossek Patour?

No, VAT can only be reclaimed when you are subject to VAT. (Ossek Mourché or Hevra Baam).

Over which period can I "go back" and claim my VAT?

You can deduct VAT back 6 months.

Sometimes a special request can be made to the VAT office to retrieve an invoice up to 5 years old!

Is there a difference in deductible expenses between Hevra Baam and Ossek Mourché?

No, the same expenses can be recognized regardless of the structure. As long as they are "professional" and not "personal" expenses.



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Boruch Levenson - CPA

A native English speaker qualified in both Israel and the UK, Boruch cares for the English speaking clients.

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