Israeli residents pay capital gains on the sale of worldwide assets.
The gain is generally calculated as the excess of the disposal price over the depreciated cost.
For tax purposes, the capital gain may be split into its 'real' and 'inflationary' components.
| Split gain | Commentary |
| Inflationary component of gain | This is calculated as follows:
Change in CPI × (Original cost – Depreciation).
The change in CPI is the percentage increase in the Israeli consumer price index (CPI) from the date of acquisition of the asset to the date of its sale.
The inflationary amount component is exempt to the extent it accrued after 1 January 1994 and is generally subject to tax at the rate of 10% if it accrued before that date. |
| Real component of gain | The remaining gain after deducting the inflationary component.
It is taxed at rates staring from 20% up to the marginal rate of income tax (see IS1.5.1) for most assets. |
The real gain realised upon the sale of shares (traded or non-traded) purchased on or after 1 January 2003 is
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