Who is considered an Israeli resident?

tax resident in Israel Cabinet Expert Comptable Dray Dray

Place of residence, a concept that can save you a lot of tax

In Israel, the notion of "residence" is paramount. Being a resident of Israel is even a luxury.

As we have explained in various places on this site, the Israeli tax system is personal, not territorial.ALSO READ: Understanding taxation in Israel

What are the advantages of being considered an "Israeli resident"?

The answer is simple: if you're an Israeli resident, you'll pay less tax.

In Israel, simply being an Israeli resident entitles you to significant tax credits, which will considerably reduce your tax bill.

Indeed, a man will be granted a tax rebate worth 5,886 Shekels per year, and a woman will be granted a tax rebate worth 7,194 Shekels per year, in accordance with sections 34, 36 and 36(a) of the Israeli Taxation Code.

An Israeli resident will also benefit from social security coverage, which is not negligible during periods of health crisis (e.g. COVID-19, etc.).

How is an "Israeli resident" defined?

To be considered an Israeli resident, a person must meet 2 criteria:

1. He must be in possession of a document proving that he is legally resident in Israel.

For example, a Téoudate Zéoute - identity document, a work visa. (A tourist can therefore be considered an Israeli resident).

2. He must meet the criteria for the "center of life" test - מרכז החיים. This means that he must prove that his center of economic life is in Israel.

Life center - מרכז החיים

The examination of the person's center of life is mainly divided into 2 fundamental questions:

  1. An objective question - where is the taxpayer's geographical residence?
  2. A subjective question - Does the taxpayer consider Israel to be his or her main center of life?

The more important it is to belong to Israel, the easier it will be to prove that the taxpayer's center of life is in Israel.

Here are a few examples that will support and back up the impostor's allegiance to Israel:

  1. The taxpayer's permanent place of residence is in Israel.
  2. The taxpayer's family's permanent place of residence is in Israel.
  3. Children are educated in Israel (schools, high schools, etc.).
  4. The taxpayer's main place of work is in Israel.

Israeli resident abroad

A person may continue to be considered an Israeli resident, even if he resides abroad for reasons such as: Study, Tiyul - long stay abroad for vacation, Training, Work etc., as long as his center of life is still in Israel.

Consult us to check whether you meet the definition of "Israeli resident" and have your expenses reimbursed. taxes !



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