Employee in Israel for a French company.
Many new emigrants continue to work in Israel for a French company, even after their aliyah. They receive a salary from abroad.
What should they do to avoid irregularities with the Israeli tax authorities? Should their salary be declared in Israel too?
What about the Bitouah leoumi?
Is there a difference between social and tax benefits for an Ole Hadash?
In this article, we take a look at how an Israeli tax resident can earn a salary abroad.
The "mixed income" issue
As a reminder, an Ole Hadash is only exempt from income tax in Israel on its revenues generated and paid outside Israel.
What happens when a person lives in Israel but works for an employer abroad?
We'll look at a number of situations and practical examples.
Case study: Salary abroad for an Ole Hadash living in Israel.
An immigrant who has made Aliyah for less than a year works for a French company and receives a salary from the French company.
This new immigrant works from Israel and travels once a month to France for a week.
- How can a person divide his or her mixed income?
- Is this income taxable in Israel at income tax or is it exempt thanks to the "10-year law"?
- How will the Bituah Leumi calculate this same income?
- Can this income be subject to social security contributions?
- If the answer is yes, can part of the social security contributions paid in France be deducted?
Answer : The Israeli tax authorities will tax this employee according to the proportion of the number of days spent on Israeli territory.
The employee will therefore have to pay Mas ahnassa (income tax in Israel) and social security contributions (Bitouah Leoumi) as a self-employed worker.
In fact, for the Bitouah leoumi, this employee does not fall within the scope of non-double taxation (in accordance with the social agreement between France and Israel) because the work is carried out from Israel (at least in part).
Important information : It's up to employee to contact the Israeli tax authorities to regularize his situation and declare his income in Israel.
Israeli working for an Israeli company abroad?
An Israeli resident who works for an Israeli employer and is sent abroad on behalf of his employer.
His income will be calculated as ordinary working income, as if he had remained in Israel.
However, there are exceptions. Please contact us for details.
Your questions - Our advice
- How can I avoid paying social security contributions twice? Once in France and once in Israel.
- How will the Israeli tax authorities know that you are working abroad?
- How has "Corona" reshuffled the deck?
- What are the risks of not declaring?
- How can the "end of 10 years" represent a considerable risk?
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