Tax resident status in Israel for tourists.

Have you ever wondered how to become a tax resident in Israel? It's a well-known fact that many foreigners come to live in Israel, while remaining tourists. Making Aliyah and obtaining Israeli nationality is a step that some will take several years to complete. Read also : How do I become an Israeli resident? However, even during this "adjustment" period, these tourists living in Israel are working, and are part of the Israeli economic system. And yet.., most of these tourists do not perceive the so-called "Nekoudote Zikouye".. These Nekoudote Zikouye - literally: tax deduction points - enable taxpayers to considerably reduce their tax liability in Israel. The reduction starts at 5,805 Shekels a year, and can reach tens of thousands of Shekels. Read also : Nekoudoye Zikouye, or how to pay less tax in Israel?

Why is the state "slow" to grant Nekoudote Zikouye to tourists?

These tourists therefore end up paying income tax (Mas Ahnassa), whereas most of the time, their income would not be taxed if they were Israeli. How is it that a tourist working in Israel finds himself short-changed in this way, you may ask? Well, the answer is simple: Israeli tax authorities are reluctant - and that's putting it mildly - to grant tourists tax resident status in Israel. Here's a quote from one of our negotiations with a tax inspector:

"If he wants the Nekoudote Zikouye, all he has to do is make Aliyah and become an Israeli." (Tax inspector in Jerusalem).

Obviously his reasoning is flawed, but this is a glimpse into the tax mentality in Israel.

Employers prefer not to take risks

As for the employers of these tourists (Call Center or others), they are responsible for withholding tax in Israel. As a result, they prefer to avoid any checks, and so rightly decide not to give points to their employees with tourist status in Israel.

Points are obtained after negotiation with the tax authorities

Our firm has represented several tourists working in Israel before the tax authorities. Each time, we have had to negotiate with the tax inspector, but we have always been successful. The reason is simple: If you want to get those famous Nekoudote Zikouye, you have to succeed in proving that your "center of economic interest" is in Israel. What the experts in the field call מבחן מרכז החיים. During this examination, the tax authorities will check which country the taxpayer has the most economic ties with. Among other things: where the place of residence is, the bank account, or where the children go to school. (This list is not exhaustive, as the authorities generally request additional proof). Once the authorities are convinced of the location of the center of interest, the taxpayer will be granted tax resident status in Israel, and will obtain the Nekoudote Zikouye and other benefits that go with it.

In conclusion: even with taxes, you have to negotiate in Israel

It's no secret that Israelis like to negotiate. As it turns out, even in the administration's offices, being at ease negotiating with a tax inspector, and having a thorough knowledge of Israeli law, can be decisive factors in determining your annual tax liability.

Your questions - Our advice :

• Can the tax authorities refuse to grant tax resident status in Israel?
• What documents do I need to prepare for the interview with the tax inspector?
• How many years back can we ask for the Nekoudote Zikouye?
• Can I get my taxes back if I don't pay Bitouah Léoumi?
• Can I be an Israeli tax resident if I still have income abroad?

As you can see, obtaining tax resident status in Israel for tourists often involves long and difficult negotiations with an Israeli tax authority. tax auditor in Israel. There are many parameters to take into account, and it is advisable to call on the services of professionals. Being represented by an accountancy firm optimizes your chances of winning your negotiations. What's more, you have the assurance that all credits and tax benefits to which you are entitled are taken into account. Contact us so that we can represent your tax case to the authorities in Israel.