Palestinian territories

Individual - Taxes on personal income

Last reviewed - 23 July 2024

Income Tax Law number 8 for the year 2011 (and its amendments) is the applicable Law in Palestine. According to this Law ‘all realised incomes in Palestine from any source for any person are taxable unless there is a clear tax exemption in the Income Tax Law’.

Personal income tax rates 

Employees who are working in Palestine are subject to tax on their wages, salaries, and benefits according to the following yearly brackets and rates:

  • From 1 to 75,000 Israeli shekels (ILS):  5%
  • From ILS 75,001 to ILS 150,000:  10%
  • From ILS 150,001 and above:  15%

See the Deductions section for specific exemptions for residents.

Resident withholding tax (WHT)

WHT must be deducted on payments to residents if such payments exceed ILS 2,500 according to the percentage or amount specified in the WHT certificate issued by the Tax Department. In case the WHT certificate is not provided, the payer must deduct 10% of the payment and transfer it to Tax Department.

Non-resident WHT

According to Income Tax Law, a resident person who pays any amount to a non-resident that is subject to tax under the provisions of this law shall withhold tax at a rate of 10% of the payment amount as a final tax and transfer it to the account of the Tax Department. If the resident fails to withhold the required tax, it shall be collected from the resident as a party responsible for paying it.

WHT on dividend

Currently, dividends are exempt from income tax, and there is no WHT on dividends. However, it is expected that a 10% tax on dividend will be imposed.