In the current economic climate many Israelis are looking for a little extra cash. As many struggle to make ends meet, and could all use a little financial assistance, and who better to provide it than the tax man (or woman)? Yes, for those people who work and pay income tax in Israel there is an easy way to get a portion of your tax back.
If you give charitable donations during the course of the year and have receipts then you are eligible to get the tax back on that money. The receipt must have a line at the bottom which states that it’s a recognized non profit organization called Seif 46.
If you are self-employed your accountant will most likely do your Israeli tax return for you. If you are employed in a company then you can do the process yourself, or in some work places you can give you charity seif 46 receipts to the HR department in November or the beginning of December and they will get you the credit in your next payslip, meaning you will then pay less income tax on your next salary. If you are doing it yourself at the end of the year, collect all your receipts and together with your Tofes 106 (end of year wage slip), take them to the Mas Hachnasa office. There are several offices located throughout the country (Ramla, Jerusalem, Haifa etc). When you get there you fill in a form, and 4-8 weeks later the money will be returned to you in your bank account.
On annual donations of over 190 NIS you can claim back an amount that adds up to 30% of your income. The amount you get back can be as much as 35% of the value of the donations, against Israeli income tax paid.
In addition You can claim back up to 25% of amounts paid into life insurance. If you have a mortgage you are required to pay life insurance, so be sure to add this in. You may also have extra life insurance policies for which you should get your tax back.
If you don’t go to claim the money back, it will not be returned to you, so NOW is the time to go and get the money that you are entitled to! (You have the right to claim money for seven years back)
For example: If you gave donations of 1000 NIS, you get a credit or return of 350 NIS.
Disclaimer: I hope this information will be useful to you, but please note that it does not replace personalized tax advice which you will get from your tax adviser. I am not a tax adviser.
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