Israel

Israeli tax residents are taxable on their worldwide income.

Non-resident individuals are subject to income tax on Israeli-source income and to capital gains tax on capital gains from assets situated in Israel (subject to special exemptions for non-residents; see Capital gains in the Income determination section for more information). Sourcing rules determine when income is to be regarded as being from an Israeli source.

Personal income tax rates

Taxation of individuals is imposed in graduated rates ranging up to 47%. Additionally, a 3% surtax applies on annual taxable income exceeding ILS 721,560, resulting in a 50% maximum income tax rate. Non-residents are taxed at the same rates as Israeli residents. The annual tax brackets are an aggregation of the monthly brackets in force during the year, which are periodically updated for inflation. The annual bracket amounts for 2025, expressed in Israeli shekels, are as follows:

A minimum tax rate of 31% generally applies to certain classes of passive income not derived from business or employment earned by a taxpayer under age 60.

Most types of interest, dividends, and capital gains have varying, fixed rates of tax set in the Income Tax Ordinance (ITO) (see the Income determination section for more information). In this respect, it should be noted that, in addition to such fixed rates, as of 2025, the portion of an individual's annual income from capital sources (e.g. capital gains, real estate appreciation, dividends, interest, CPI linkage differentials, rental income, passive royalties) exceeding a certain threshold (ILS 721,560 in 2025) is subject to an additional surtax of 2%.

Local income taxes

There are no local taxes on income in Israel.