Taxes: Income, VAT, & The Rest

Lesson 135 · מִיסּוּי

Israel\'s tax system is progressive, complex, and pervasive. Income tax brackets up to 50%. VAT (מַע"מ) at 18% (raised from 17% in 2025). Bituach Leumi (national insurance) ~12% combined. Property tax (אַרְנוֹנָה) varies by city. Lesson 47 covered tax filing basics; this lesson covers the structural picture, what gets taxed and at what rate.

Cultural note, Most Israeli salaried workers do not file annual income tax returns, the employer withholds and reports. Self-employed (עוֹסֵק מֻרְשֶׁה) must file. The Israeli tax authority is "מַס הַכְנָסָה" (Mas Hachnasa), feared and respected. Olim hadashim get major tax breaks for ~10 years. The "אֲהֲדָה", sympathy/benefit, for olim is real and substantial.

Tax Authority & Bodies

Income Tax (Mas Hachnasa)

VAT & Indirect Taxes

Self-Employed (Osek)

Olim & Returning Residents Benefits

Reading an Israeli Payslip (Tlush Sachar)

A typical Israeli payslip has dozens of lines. Below: the key fields you must know to verify you are being paid correctly.

Annual Tax Settlement Conversation with Accountant

An "תֵּאוּם מַס" (tax coordination) conversation. Salaried Israelis with multiple income sources or recent immigrants often need this annually.