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 (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 give it to the person who does the salaries for your employer. you will then pay less income tax on your next salary. If you are doing it yourself at the end of the year,you will need to 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 between 400 and 4 million 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.
For example if you paid income tax of 8,000 NIS in 2019 and you gave donations of 5,000 NIS you are entitled to 5,000×35% =1,750 NIS 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)
If you have questions please feel free to contact me.
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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