Tel: +972-54-7240 133

e-Mail: antoine.ishaq@expatgroup.net

Looking for assurance on your residency breaking?

WE’RE ON THE JOB!

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Insights:

Residency breaking from the state of Israel and avoid paying Israeli taxes on Non-Israeli source incomes is not a straight forward process, a plan of actions should be set in advance at the pre-departure  consultation stage and the following matters should be taken into consideration:

  • The probability such residency breaking claim will be accepted by the Israeli tax authority

  • Social security and Medicare coverage implications

  • Exit tax (section 100A of the Israeli tax ordinance) which might have major tax influence on shareholders and founders

  • Real estate taxes

Equity bases compensation such as stock options, RSUs, ESPP etc. is a method to encourage retention and compensate employees over the long run. The standard vesting period, at which the employee earns his right for that particular profit, ranges between one to four years and therefore, upon transfer to a different tax jurisdiction, certain tax implications might occur such as:

 

  • Different timing of taxation

  • Different characterization of income and tax rates

  • Double tax withholding and the avoidance of tax credit at the other jurisdiction

  • Double payment of social taxes

 

Services:

Our group has personally accompanied hundreds of relocating individuals from the pre-departure consultation meeting, through filing tax returns with the Israeli tax authority, discussion  with the Israeli tax authority to proof residency breaking and obtain eligible equity related tax refunds until the file with the tax authority is closed and assurance is provided regarding the individual’s residency status.

 

Such process could take from two to five years depends on the complexity of the tax issues and the amount of refund discussed but no worries! This is what we do for a living.

We provide solutions in several types of services

  • Pre-departure tax consulting meeting

  • Preparation and filing of individual Israeli tax returns

  • Representation and discussions in front of the Israeli tax authority through routine tax audit

  • Representation with the Israeli social security

  • Expatriate tax advisory services

Israel has entered into a totalization agreement (treaty for social purposes) with several countries while Israeli resident individuals may be exempt from host country social taxes if he has a Certificate of Coverage from the Israeli social security authority and this would only be applicable if remained paid under Israeli payroll during the assignment.