- Income tax brackets updated
- Special tax regimes updated
Added the 2% capital-income surtax and a CFC summary (PwC).
IL
Israel
Western Asia
ILS
IL · ISR · #148 · 18 cities
Nomad score
58/100
Compare
Top income tax
50.0%
Worldwide system
Corporate tax
23.0%
VAT
18.0%
standard rate
Tax residency
183 days
58 tax treaties
Israel tax profile
Data year: 2026
- Tax system
- Worldwide Worldwide income taxation for residents. The 2026 budget widened the 20% and 31% earned-income bands (effective 1 January 2026); headline rates and the ILS 721,560 surtax threshold are unchanged.
- Top PIT rate
- 50.0%
- Corporate tax rate
- 23.0%
- VAT
- 18.0%
- Capital gains tax
- 25.0% Real capital gains: 25% (30% for substantial shareholders). Real estate appreciation tax varies. Listed securities: 25%. A 3% surtax applies when total annual taxable income from all sources exceeds ILS 721,560 (50% marginal rate on earned income in that band). From 2025, capital-source income above the same threshold also faces an additional 2% surtax on the excess capital income.
- Social security (employee)
- 7.0%
- Social security (employer)
- 7.6%
- Social security cap (annual)
- ILS 622,920
- Dividend withholding
- 25.0%
- Interest withholding
- 25.0%
- Royalty withholding
- 25.0%
- Treaty count
- 58
Income tax brackets
Personal income
| Bracket min | Bracket max | Rate |
|---|---|---|
| ILS 0 | ILS 84,120 | 10.0% |
| ILS 84,120 | ILS 120,720 | 14.0% |
| ILS 120,720 | ILS 228,000 | 20.0% |
| ILS 228,000 | ILS 301,200 | 31.0% |
| ILS 301,200 | ILS 560,280 | 35.0% |
| ILS 560,280 | ILS 721,560 | 47.0% |
| ILS 721,560 | and above | 50.0% |
Social security
| Bracket min | Bracket max | Rate |
|---|---|---|
| ILS 0 | ILS 92,436 | 1.0% |
| ILS 92,436 | ILS 622,920 | 7.0% |
Special regimes (1)
| Name | Rate/amount | Duration | Status |
|---|---|---|---|
| Section 14 — new immigrant and senior returning resident Ten-year exemption from Israeli tax on foreign-source income and on capital gain... | No rate or amount recorded | 10yr | Active |
Tax flags
Non-Dom Regime
Tax residency
- Days threshold
- 183 days
- Residency rules
- Resident if center of life is in Israel (considering family, economic, and social ties). Presumed resident if present 183+ days in a tax year, or 30+ days in the current year and a total of 425+ days in the current and two preceding years.
- Exit tax
- Yes Deemed disposal of assets at market value upon ceasing Israeli residency, with optional deferral until actual sale.
- CFC rules
- Yes Israeli residents controlling foreign companies meeting CFC conditions may be taxed on undistributed passive profits taxed abroad at 15% or less.
- Non-dom regime
- New immigrants and senior returning residents (generally ten+ years abroad) receive a ten-year exemption from Israeli tax on qualifying foreign-source income and foreign capital gains under Income Tax Ordinance section 14. Those who become tax residents from 1 January 2026 onward must report foreign exempt income during the ten-year period; the tax exemption itself remains.
Filing information
- Fiscal year
- 01-01 – 12-31
- Filing deadline
- April 30
Sources
- Israel Tax Authority — monthly income tax deductions booklet 2026 (accessed Oct 9, 2026) 2026 earned-income brackets after Economic Efficiency Law bracket widening
- PwC Worldwide Tax Summaries — Israel (accessed Oct 9, 2026) PIT brackets, surtaxes, CIT 23%, VAT 18%, withholding, national insurance, Section 14 immigrant benefits, exit tax, CFC