Israel

Employment expenses

Employees are entitled to relatively few deductions. However, subsistence expenses if required to travel out of town and subsistence expenses abroad may be deducted in accordance with detailed rules.

Contributions to an approved provident fund and a training fund are deductible up to predetermined limits for the self-employed and certain employees.

Personal deductions

Mortgage interest and medical expenses are not deductible. Charitable contributions are not deductible, but a tax credit may be allowed (see the Other tax credits and incentives section for more information).

Tax credits and deductions are granted for certain payments for life insurance premiums and payments to provident and pension funds.

Personal allowances

In Israel, personal allowances take the form of tax credits (see the Other tax credits and incentives section for more information).

Business deductions

Business expenses deductible from business-source income must be incurred wholly and exclusively during the tax year for the purposes of producing this income.

Self-employed individuals are subject to special rules for determining the deductibility of expenditure on the maintenance of private and small commercial vehicles, as well as other expenditures, such as telephone costs when the business is conducted from the taxpayer's house.