Israel

Business Environment

Business practices

For further information: Doing Business with Israel
For further information: Guide to Israel
Closed hours and days: The weekend in Israel is on Friday and Saturday. Offices close at 1700 hrs in the evening.

Public holidays

Purim (carnival)	March/April
Pesah (Easter)	April
Independence Day of Israel	May
Shavouth	May/June
Rosh Hashana (New Year)	September/October
Yom Kipour (Day of Atonement)	October
Souccoth (Festival of Huts)	October
Simhat Torah, start of the reading of the Torah	October
Hanukkah (Festival of Lights)	End November/December

Compensation day: All the festivals have a precise date according to the Hebrew calendar and may vary according to the Gregorian calendar. There is no compensation when a public holiday falls on Friday or Saturday.

Periods when companies usually close

Days of Jewish Festivals
Period of Pessah (Easter)	April
Period of Souccoth (Festival of Huts)	October

Standards

National standards organizations: The Standards Institution of Israel (SII)
Integration in the international standards network: International Organisation for Standardization (ISO)
International Electrotechnical Commission (IEC)
International Telecommunication Union (ITU)
International Organisation of Legal Metrology (OIML)
Classification of standards
Online consultation of standards: The Standards Institution of Israel (SII)
ISO Catalogue
Certification organizations: The Standards Institution of Israel

Legal framework

Independence of justice: The judicial power is largely independent in Israel and the guarantees of procedure are generally respected.
Equal treatment of nationals and foreigners: Foreign nationals can be expected to benefit from a equitable legal process.
The language of justice: The legal language of the country is Hebrew but Arabic is also used officially by the Arab minorities of the country .
Having recourse to an interpreter: Yes
Sources of the law and legal similarities: Israel does not have written constitution. Certain functions of the constitution are fulfilled by Declaration of Independence (1948), the fundamental laws of the parliament and the Israeli citizen law. The legal system is a blend of Common English Law, British Mandate Regulations and Jewish Christian and Muslim rights as far as the personal status is concerned.Israel no longer accepts the necessary jurisdiction of CIJ.
Consulting national laws online: http://www.lexadin.nl/wlg/legis/nofr/oeur/lxweisr.htm">Lexadin, the world law guide

Intellectual Property

National organizations: Israeli Patents Office of the Ministry of Justice for patents and copyrights.
Regional organizations: Israel is signatory of European Convention on the International Classification of Patents for Invention and European Convention on patent formalities, as well as Global Convention of copyrights et of the Lisbon agreement. In any case, it is preferable to ensure a registration of foreign patents over Israeli territory.
International membership: Member of the WIPO

Tax rates

Consumption taxes

Nature of the tax: VAT - (MA'AM in Hewbrew)
Tax rate: 15.50%
Reduced tax rate: Export of products and certain services is not subjected to VAT or is subjected to nil rate.
Other consumption taxes: Tax on Capital gains from real-estate is applicable on the sale of the real estate.
Purchase tax is deducted on some imports or local industrial production.

Corporate taxes

Tax rate

The rate of corporate taxation is 27%.
There are reduced rates of Corpotate Tax from 0% to 25% for certain foreign companies investing in IsraÃ«l, particularly in the tourism and industry sectors.

Tax rate for foreign companies

The resident companies are taxed on their total income, while the non-resident companies are taxed on incomes from activities in Israel.

Capital gains taxation

2 rates : 25% / 34%

Main allowable deductions and tax credit

Deduction are granted when the company invests in scientific research in the fields of industry, agriculture, transport or energy. A dedution is possible at the time of investments in oil companies.

Other corporate taxes

Individual taxes

Tax rate

The rate is progressive from 10% to 50% spread over 5 sections.:
Tax schedule, monthly returns in shekels.

Tax schedule 2005 :

Rate	Return
10%	1-52680
16%	52680 -93720
26%	93720-140640
33%	140640-202080
35%	202080-435120
47%	>435120

Allowable deductions and tax credit

Tax deductions are granted to residents of priority areas and far from the center of the country.

Special expatriate tax regime

Certain expatriates are subjected to a special system with a maximum rate of 25%, other follow the normal system. Foreign residents are exempted from taxes on capital gains resulting from share investments in the Tel-Aviv Stock Exchange.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: Israel has signed financial agreements with several countries in the world.
Whithholding taxes
Bilateral agreement

Sources of fiscal information

Tax Authorities: Ministry of Trade and Industry of Israel.
Other domestic resources

Accounting rules

Tax year: The financial year starts from 1 January and ends on 31 December of the same year.
Accounting standards: The Israeli Accounting Standards.

Accounting in Israel started with the help of the American Institute called "The American Institute of Certified Public Accountants "(AICPA). The accounting practices in these countries are similar to American practices.
Accounting regulation bodies: http://www.iasb.org.il/
">Israeli Accounting Standards Council (IASB)
Accounting reports: The financial accounts include a balance sheet, an income statement, a cash flow account and an owner's equity account.
Publication
Professional accountancy bodies: http://www.icpas.org.il/english/
">Institute of Certified Public accountants in Israel(ICPA)
IFAC (International Federation of Accountants)
Certification and auditing: Audit is carried out by external auditors in the company.
KPMG, Ernst and Young, Pricewaterhouse Coopers, Deloitte.
Accounting news: ">