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Nékoudate Zikouye - or how to legally pay less tax?

Nékoudate Zikouye Cabinet Expert Comptable Dray & Dray

Definition of a tax credit in Israel

Nékoudate Zikouye - literally "deduction point", means a tax credit that you can deduct from your annual tax bill.

In other words, thanks to these deduction points, you can considerably reduce the taxes you have to pay to the State of Israel.

What is the value of a Nékoudate Zikouye?

In concrete terms, each Nékoudate Zikouye saves you a whopping NIS 242 in taxes/month, i.e. a saving of NIS 2,904/year. (in 2024)

As you can see, the more Nékoudote Zikouye you can get, the less tax you'll have to pay, or even none at all!

How do you get these famous Nékoudote Zikouye?

The Israeli tax code has established well-defined rules and criteria for awarding these deduction points.

As the number of criteria is rather long, we will concentrate here on the main causes that entitle you to these famous "deduction points":

  1. All Israeli residents are automatically awarded 2.25 points. (Read the article: "How to become an Israeli resident)
  2. An Israeli resident woman is entitled to an additional 0.5 points.
  3. A new immigrant - Ole Hadash, is entitled to accumulate the following benefits during the 42 months following the date of his Aliyah:
    • 1 point for the first 12 months.
    • 3 points for the following 12 months.
    • 2 points for the following 12 months.
    • 1 point for the following 12 months.
  4. For a woman with minor children :
  • In the year of the child's birth, this woman will be entitled to 1.5 points.
  • For the following 17 years, this woman will be entitled to 1 additional point.
  1. For a man with children under 6 :
  • In the year of the child's birth, this man will be entitled to an additional 1.5 points.
  • For the next 5 years, this man will be entitled to 1 point/year.
  • The following year (when the child is over 6 years old), this man will be entitled to 1 additional point.
  1. If you have studied for a bachelor's degree, you can claim 1 additional point / year of study completed. (Please consult us for restrictions applying to students who graduated in the years 2014 - 2017).
  2. If you have studied for a Master's degree, you are entitled to an additional 0.5 points / year of study completed. (Please consult us for restrictions applying to students who graduated in the years 2014 - 2017).
  3. A soldier who has completed his military service or cheirout leoumi (national service) can claim additional points for the 3 years following the end of his military service.

Are you an employee? Assert your rights!

If you are an employee, you must declare to your employer the reasons that entitle you to additional Nékoudate Zikouye.

To qualify for your Nékoudate Zikouye, all you have to do is fill in the Tofes 101 - Form 101, which must be completed every tax year, and in which you must describe your marital status, number of children, date of Aliyah, etc., as well as your income.

Please note that you alone are responsible for the truthfulness and accuracy of the information you provide to your employer. If, for example, you fail to inform your employer of the birth of your last child, your employer cannot be held responsible for any overpayment of tax.

Recover your money up to 7 years in the past

If you find that over the past 7 years you have paid more tax than necessary, or if you find criteria in the list above that entitle you to additional deduction points, you can recover the overpayment of tax over a retroactive period of 7 years!

For example, an Ole Hadash - a new immigrant - who has "forgotten" to declare to his employer that he has made Aliyah, will be able to recover the modest sum of almost NIS 16,000, provided he has overpaid his taxes, of course.

Consult us if you would like assistance in obtaining your rights retroactively over a 7-year period.

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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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Our consultants in Jerusalem

English speaking accountants in Israel
Address: Kanfei Nesharim 68. Merkaz Oranim
Phone number: 02 631 9000
Fax: 02 631 9005
Email: office@cpa-dray.com