Welcome to the journey of becoming a tax resident in Israel! Whether you are a digital nomad, an expat, or a location-independent worker, Israel offers a vibrant lifestyle and a robust economic environment. Below are the steps to help you navigate the process of establishing your tax residency in Israel.
Step 1: Understand the Residency Criteria
To qualify as a tax resident in Israel, you need to meet specific criteria based on the number of days you spend in the country. According to Israeli tax law, you are considered a resident if you are physically present in Israel for 183 days or more during a tax year, or if you are present in Israel for 30 days or more in a tax year and a total of 425 days or more over the current and the preceding two tax years.
Step 2: Gather Required Documentation
Collect all necessary documentation including your passport, visa, proof of residence (such as a rental agreement or utility bill), and any other documents that can substantiate your physical presence and intent to reside in Israel.
Step 3: Open a Local Bank Account
To reinforce your intent of becoming a resident, you should open a local bank account in Israel. This will serve as proof of your financial ties to the country. You will need identification documents, proof of residence, and an initial deposit to open the account.
Step 4: Obtain an Israeli Identification Number
Visit the local Ministry of Interior office to apply for an Israeli Identification Number (Teudat Zehut). This is a crucial step as it will be required for various legal and administrative processes in Israel. You will need to provide identification documents and proof of residence.
Step 5: Register with the Israeli Tax Authority
Once you have your Israeli Identification Number, you must register with the Israeli Tax Authority. This involves completing specific tax forms and providing the necessary documentation to establish your tax status. Registration can often be done online through the Tax Authority's website.
Step 6: Maintain Records and Compliance
After you have registered, it is essential to maintain accurate records of your income, expenses, and any taxes paid. Ensure that you comply with all Israeli tax laws and file your annual tax returns on time to avoid penalties.
Legal References
- Income Tax Ordinance (New Version), 1961
- Israel Tax Authority Guidelines
- Ministry of Interior Regulations
Useful Links
