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2011
       Lior Pick & Co.

       Law offices




                The State of Israel – A Tax Benefit Paradise for Foreign
                   Residents, New Immigrants & Returning Israelis

                           Lior Pick, Advocate (CPA (Isr.) TEP

           Over recent years, the State of Israel has become a true paradise in all related to
           withdrawing foreign capital and foreign residents and new immigrants'
           investments. Inter-alia, this is because of a sophisticated taxation system that
           grants far-reaching tax benefits and relief as well as an impressive list of
           exemptions for foreign residents, new immigrants and returning Israelis.

           The aforementioned along with a stable economy, a gradual reduction in
           taxation rates and extensive tax agreements (more than 40 agreements), places
           Israel as a leader in all relating to investments in technology high tech
           companies and real estate assets as well as providing an ultimate framework for
           international taxation planning for companies and individuals.

           Most important of all, Israel is a secure haven for Diaspora Jews.

           The following schedule provides a summary of tax benefits, relief and
           exemptions pursuant to Israeli legislation, which can be used legitimately:

               1. A tax exemption in Israel on all types of income, earnings and assets
                  (outside of Israel) for 10 years for new immigrants & returning
                  Israelis. This exemption is accompanied by an exemption on reporting
                  the aforementioned earnings, income and assets.


Lior Pick & co Law Offices                                                        ‫ליאור פיק ושות''- משרד עורכי דין‬
2 Hanechoshet St., Ramat Ha'chayal,
                                                                                   ‫ליאור פיק ושות משרד עורכי די‬
                                                                           ‫הנחושת 2,, רמתהחייל,, תל-אביב, ישראל‬
                                                                            ‫הנחושת 2 רמת החייל תל אביב, ישראל‬
Tel Aviv, ISRAEL                                                                           +972-3-5105002 :: ‫טלפו‬
Tel: +972-3-5105002                                                                         +972-3-5105002 ‫טלפון‬
                                                                                            +972-3-5105025 ::‫פקס‬
                                                                                             +972-3-5105025 ‫פקס‬
Fax: +972-3-5105025                                                           office@pick-law.com:‫דואר אלקטרוני‬
E-mail: office@pick-law.com                                                     office@pick-law.com:‫דואר אלקטרוני‬
2. There is no estate tax in Israel, and no gift tax apart from a gift to a
                  "foreign citizen" of a taxable assets and capital gains in Israel.

               3. An exemption from capital gains tax for Foreign Residents on the sale
                  of securities registered and traded on the TASE by foreign residents

               4. An exemption from Capital Gains tax for Foreign Residents on the
                  sale of shares in an Israeli company (or foreign company, provided that
                  most of its assets are in Israel), subject to a number of terms and
                  conditions.

               5. An exemption from Income tax on interest on bank's deposits by foreign
                  residents and/or new immigrants.

               6. An exemption from tax for foreign residents on income from interest
                  and linkage differentials on bonds traded on the TASE (subject to
                  certain terms and conditions).

               7. An exemption from tax on residential rent up to approx. €900 per
                  month per individual. Alternatively, a reduced tax rate of only 10% on
                  residential rents (without the deduction of expenses, credits or
                  exemptions).

               8. An exemption from betterment tax in Israel on the sale of an absolved
                  residential apartment (under certain terms and conditions), once every
                  four years (or 18 months when this is the only apartment).

                   Furthermore, there are prescribed tax exemptions on land
                   swapping, vacating and construction transactions, on certain
                   transfers as a gift to a relative, on legacies, on transfers from a
                   trustee to a beneficiary, on transfers to a land association, on
                   transfers from a land association under dissolution.

                   New immigrants are entitled to an exemption from purchases tax up
                   to a sum of approx. NIS 1.4 million (approx. €280,000), as at February
                   2010 and on the balance they should pay 5%.

Lior Pick & co Law Offices                                                     ‫ליאור פיק ושות'- משרד עורכי דין‬
2 Hanechoshet St., Ramat Ha'chayal,                                     ‫הנחושת 2, רמת החייל, תל-אביב, ישראל‬
Tel Aviv, ISRAEL                                                                        +972-3-5105002 :‫טלפון‬
Tel: +972-3-5105002                                                                      +972-3-5105025 :‫פקס‬
Fax: +972-3-5105025                                                        office@pick-law.com:‫דואר אלקטרוני‬
E-mail: office@pick-law.com
9. Section 6 of the agreement between Israel and France (from 1963)
                 prescribes that the tax on income from property assets (real estate) in
                 Israel to be paid by a French citizen will only be paid in Israel (the place
                 and which the land is located). The opposite holds true for an Israeli
                 citizen who invests in real estate in France.

                  Section 13 of the agreement adds that earnings produced from
                  transferring land will be taxed in the engaging country in which the
                  aforementioned land is located.

              10. A low company tax rate (compared with other countries).

                  In 2011, a fixed rate of 24% - to be reduced by 1% per year until 18% in
                  2016.

              11. Foreign citizen trust – Under certain conditions, no tax liability shall
                  apply to trusteeships and Israeli citizen beneficiaries.

              12. An investment in a REIT fund – An alternative to a direct investment
                  in real estate, enables distributing the investment over a number of
                  assets, even when the investments is not high. A further advantage –
                  negotiability, compared with a direct investment in real estate.

              13. An exemption from capital gains tax in Israel for foreign investors in
                  hedge funds.


                  The aforementioned contains nothing to serve as an opinion and/or
                  an alternative to individual legal taxation advice. We will be happy
                  to be at your disposal for any queries and or explanations regarding
                  this or any general matter.

                  Our office specializes in taxation advice (income tax, betterment
                  tax, VAT) and also accompanies real estate, company and
                  international transactions.



Lior Pick & co Law Offices        Yours   sincerely,                              ‫ליאור פיק ושות'- משרד עורכי דין‬
2 Hanechoshet St., Ramat Ha'chayal,                                        ‫הנחושת 2, רמת החייל, תל-אביב, ישראל‬
Tel Aviv, ISRAEL                                                                           +972-3-5105002 :‫טלפון‬
                                           Lior Pick & Co. Law offices
Tel: +972-3-5105002                                                                         +972-3-5105025 :‫פקס‬
Fax: +972-3-5105025                                                           office@pick-law.com:‫דואר אלקטרוני‬
E-mail: office@pick-law.com

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Taxparadise

  • 1. 2011 Lior Pick & Co. Law offices The State of Israel – A Tax Benefit Paradise for Foreign Residents, New Immigrants & Returning Israelis Lior Pick, Advocate (CPA (Isr.) TEP Over recent years, the State of Israel has become a true paradise in all related to withdrawing foreign capital and foreign residents and new immigrants' investments. Inter-alia, this is because of a sophisticated taxation system that grants far-reaching tax benefits and relief as well as an impressive list of exemptions for foreign residents, new immigrants and returning Israelis. The aforementioned along with a stable economy, a gradual reduction in taxation rates and extensive tax agreements (more than 40 agreements), places Israel as a leader in all relating to investments in technology high tech companies and real estate assets as well as providing an ultimate framework for international taxation planning for companies and individuals. Most important of all, Israel is a secure haven for Diaspora Jews. The following schedule provides a summary of tax benefits, relief and exemptions pursuant to Israeli legislation, which can be used legitimately: 1. A tax exemption in Israel on all types of income, earnings and assets (outside of Israel) for 10 years for new immigrants & returning Israelis. This exemption is accompanied by an exemption on reporting the aforementioned earnings, income and assets. Lior Pick & co Law Offices ‫ליאור פיק ושות''- משרד עורכי דין‬ 2 Hanechoshet St., Ramat Ha'chayal, ‫ליאור פיק ושות משרד עורכי די‬ ‫הנחושת 2,, רמתהחייל,, תל-אביב, ישראל‬ ‫הנחושת 2 רמת החייל תל אביב, ישראל‬ Tel Aviv, ISRAEL +972-3-5105002 :: ‫טלפו‬ Tel: +972-3-5105002 +972-3-5105002 ‫טלפון‬ +972-3-5105025 ::‫פקס‬ +972-3-5105025 ‫פקס‬ Fax: +972-3-5105025 office@pick-law.com:‫דואר אלקטרוני‬ E-mail: office@pick-law.com office@pick-law.com:‫דואר אלקטרוני‬
  • 2. 2. There is no estate tax in Israel, and no gift tax apart from a gift to a "foreign citizen" of a taxable assets and capital gains in Israel. 3. An exemption from capital gains tax for Foreign Residents on the sale of securities registered and traded on the TASE by foreign residents 4. An exemption from Capital Gains tax for Foreign Residents on the sale of shares in an Israeli company (or foreign company, provided that most of its assets are in Israel), subject to a number of terms and conditions. 5. An exemption from Income tax on interest on bank's deposits by foreign residents and/or new immigrants. 6. An exemption from tax for foreign residents on income from interest and linkage differentials on bonds traded on the TASE (subject to certain terms and conditions). 7. An exemption from tax on residential rent up to approx. €900 per month per individual. Alternatively, a reduced tax rate of only 10% on residential rents (without the deduction of expenses, credits or exemptions). 8. An exemption from betterment tax in Israel on the sale of an absolved residential apartment (under certain terms and conditions), once every four years (or 18 months when this is the only apartment). Furthermore, there are prescribed tax exemptions on land swapping, vacating and construction transactions, on certain transfers as a gift to a relative, on legacies, on transfers from a trustee to a beneficiary, on transfers to a land association, on transfers from a land association under dissolution. New immigrants are entitled to an exemption from purchases tax up to a sum of approx. NIS 1.4 million (approx. €280,000), as at February 2010 and on the balance they should pay 5%. Lior Pick & co Law Offices ‫ליאור פיק ושות'- משרד עורכי דין‬ 2 Hanechoshet St., Ramat Ha'chayal, ‫הנחושת 2, רמת החייל, תל-אביב, ישראל‬ Tel Aviv, ISRAEL +972-3-5105002 :‫טלפון‬ Tel: +972-3-5105002 +972-3-5105025 :‫פקס‬ Fax: +972-3-5105025 office@pick-law.com:‫דואר אלקטרוני‬ E-mail: office@pick-law.com
  • 3. 9. Section 6 of the agreement between Israel and France (from 1963) prescribes that the tax on income from property assets (real estate) in Israel to be paid by a French citizen will only be paid in Israel (the place and which the land is located). The opposite holds true for an Israeli citizen who invests in real estate in France. Section 13 of the agreement adds that earnings produced from transferring land will be taxed in the engaging country in which the aforementioned land is located. 10. A low company tax rate (compared with other countries). In 2011, a fixed rate of 24% - to be reduced by 1% per year until 18% in 2016. 11. Foreign citizen trust – Under certain conditions, no tax liability shall apply to trusteeships and Israeli citizen beneficiaries. 12. An investment in a REIT fund – An alternative to a direct investment in real estate, enables distributing the investment over a number of assets, even when the investments is not high. A further advantage – negotiability, compared with a direct investment in real estate. 13. An exemption from capital gains tax in Israel for foreign investors in hedge funds. The aforementioned contains nothing to serve as an opinion and/or an alternative to individual legal taxation advice. We will be happy to be at your disposal for any queries and or explanations regarding this or any general matter. Our office specializes in taxation advice (income tax, betterment tax, VAT) and also accompanies real estate, company and international transactions. Lior Pick & co Law Offices Yours sincerely, ‫ליאור פיק ושות'- משרד עורכי דין‬ 2 Hanechoshet St., Ramat Ha'chayal, ‫הנחושת 2, רמת החייל, תל-אביב, ישראל‬ Tel Aviv, ISRAEL +972-3-5105002 :‫טלפון‬ Lior Pick & Co. Law offices Tel: +972-3-5105002 +972-3-5105025 :‫פקס‬ Fax: +972-3-5105025 office@pick-law.com:‫דואר אלקטרוני‬ E-mail: office@pick-law.com