preface

BDO Israel
DOING BUSINESS IN ISRAEL
The ceiling creates an effective 57% tax rate, 45% income tax and 12%
social security, on a monthly income of NIS 40,230 - NIS 73,422.
8.9.2. Pension Contributions
An Extension Order issued by the Minister of Industry Trade and Labor
went into effect on January 2008, obligating all employers and
employees in Israel to contribute a certain s amount of the monthly
wages into a pension funds. The Extension Order does not apply to
employees for whom pension funds have already been established.
Pension contribution rates are as follows:
As of Employer Employee
Severance
(Employer)
Total
1.1.2008 0.833% 0.833% 0.834% 2.5%
1.1.2009 1.66% 1.66% 1.68% 5%
1.1.2010 2.5% 2.5% 2.5% 7.5%
1.1.2011 3.33% 3.33% 3.34% 10%
1.1.2012 4.16% 4.16% 4.18% 12.5%
1.1.2013 5% 5% 5% 15%
8.9.3. Customs Duties
Certain goods imported to Israel are subject to customs duties. The rates
vary and are usually based on CIF value. Various trade agreements with
the United States, European Community and EFTA reduce duties in
comparison with imports from other countries.
8.9.4. Purchase Tax
Certain goods sold in Israel are subject to purchase tax.
8.9.5. Municipal Tax
Municipalities impose annual taxes on real estate. The rates usually
depend on the location and actual built area.
8.9.6. Estate Tax
As of the date of this publication, Israel has no estate tax.
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