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IS1.3.1ÌýÌýÌýÌý Income tax

Taxpayers are subject to a progressive income tax based on taxable income (see IS1.5.1).

The tax due for individuals is determined by taking the individual's income and subtracting the exclusions to find the gross income.

Further deductions are subtracted from gross income to find the adjusted gross income.

The greater of the standard deduction or the itemized deductions is then subtracted from the adjusted gross income, and then the personal and dependency exemptions are subtracted to find the taxable income.

The taxable income is multiplied by the applicable tax rate, then any tax credits are subtracted to find the total tax due or refund amount.

Israeli tax residents are taxable on their worldwide income. A non-resident person is taxable in respect of any income produced in Israel, as if they were an Israeli resident (see IS1.4.1).

Gross income includes:

1. Ìý

   •ÌýÌýÌýÌý employment income

2. Ìý

   •ÌýÌýÌýÌý dividend and interest income

3. Ìý

   •ÌýÌýÌýÌý rental or other asset income

4. Ìý

   •ÌýÌýÌýÌý annuity and pension income

5. Ìý

   •ÌýÌýÌýÌý partnership and business income

6. Ìý

   •ÌýÌýÌýÌý agriculture income