Individual - Taxes on personal income

Last reviewed - 30 June 2023

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 698,280 Israeli shekels (ILS), 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 2023, expressed in Israeli shekels, are as follows:

Annual taxable income (ILS) Tax on column 1 (ILS) Tax on excess (%)
Over (column 1) Not over
0 81,480 0 10
81,480 116,760 8,148 14
116,760 187,440 13,087 20
187,440 260,520 27,223 31
260,520 542,160 49,877 35
542,160 698,280 148,451 47
698,280 221,827 50

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).

Local income taxes

There are no local taxes on income in Israel.