The tax ordinance in Israel imposes a tax on the taxable income of an Israeli resident generated by him in a given year anywhere in the world (subject to the treaty for the prevention of double taxation).
Today residency in Israel is determined according to the “Center of Life Test” which is a qualitative weighting of tests: a set of family, economic and social ties. In addition, there is a quantitative test that establishes a rebuttable presumption of the “day test” according to which a person who is in Israel for 183 days or more in a given year or 30 days in a given year and also 425 days in three consecutive tax years will be considered a resident of Israel. These qualitative tests and the fact that we are dealing with a conflicting possession increased the legal uncertainty and serves as fertile ground for aggressive tax plans on the one hand and aggressive positions of the tax authority on the other, and friction between the citizen and the tax authority. Therefore, the memorandum of the law proposes, as part of the implementation of the recommendations of the International Taxation Reform Committee, to establish two definitive presumptions: one, if a person stayed in Israel for 183 days in a given year, as well as 183 days in the year before or after it, then in the given year he will be considered definitively a resident of Israel. This is also the case if the taxpayer stayed in Israel for 100 days or more, if in the two previous years together with the current year he stayed in Israel for 450 days or more (and did not stay in a compensating country for 183 days or more in one of the years). The possession will also take place in circumstances where the taxpayer stayed in a given year for 100 days or more if he has a spouse who is a resident of Israel. The second, if a person stayed in Israel in each of the years under consideration (as a period) for less than 30 days, he will definitely be considered a foreign resident, unless he stayed in Israel at the beginning of the first year under consideration and at the end of the last year under consideration for more than 15 days in Israel, as long as the taxpayer has a probationary spouse. The “days” for determining residency is 60 days and 30 days respectively. The taxpayer will be considered a foreign resident if he stayed in Israel during the considered period for less than 100 days and stayed in a compensatory country in one of the years for 183 days or more). The idea behind the legal memorandum is to allow legal certainty and the claimant of non-existence of residency in Israel despite the existence of resolute possession must produce a residency certificate for tax purposes from the compensating country.
The tax ordinance in Israel imposes a tax on the taxable income of an Israeli resident generated by him in a given year anywhere in the world (subject to the treaty for the prevention of double taxation).
Today residency in Israel is determined according to the “Center of Life Test” which is a qualitative weighting of tests: a set of family, economic and social ties. In addition, there is a quantitative test that establishes a rebuttable presumption of the “day test” according to which a person who is in Israel for 183 days or more in a given year or 30 days in a given year and also 425 days in three consecutive tax years will be considered a resident of Israel. These qualitative tests and the fact that we are dealing with a conflicting possession increased the legal uncertainty and serves as fertile ground for aggressive tax plans on the one hand and aggressive positions of the tax authority on the other, and friction between the citizen and the tax authority. Therefore, the memorandum of the law proposes, as part of the implementation of the recommendations of the International Taxation Reform Committee, to establish two definitive presumptions: one, if a person stayed in Israel for 183 days in a given year, as well as 183 days in the year before or after it, then in the given year he will be considered definitively a resident of Israel. This is also the case if the taxpayer stayed in Israel for 100 days or more, if in the two previous years together with the current year he stayed in Israel for 450 days or more (and did not stay in a compensating country for 183 days or more in one of the years). The possession will also take place in circumstances where the taxpayer stayed in a given year for 100 days or more if he has a spouse who is a resident of Israel. The second, if a person stayed in Israel in each of the years under consideration (as a period) for less than 30 days, he will definitely be considered a foreign resident, unless he stayed in Israel at the beginning of the first year under consideration and at the end of the last year under consideration for more than 15 days in Israel, as long as the taxpayer has a probationary spouse. The “days” for determining residency is 60 days and 30 days respectively. The taxpayer will be considered a foreign resident if he stayed in Israel during the considered period for less than 100 days and stayed in a compensatory country in one of the years for 183 days or more). The idea behind the legal memorandum is to allow legal certainty and the claimant of non-existence of residency in Israel despite the existence of resolute possession must produce a residency certificate for tax purposes from the compensating country.
