1.Ministry
of Finance
(a) Economic Research and State
Revenue Administration
The Economic Research and State
Revenue Administration has two
duties: dealing with tax policy,
and providing the Ministry of
Finance with macroeconomic
consulting services. In tax
policy, it has various duties:
advising the Minister of Finance
and his official in matters of tax
policy; formulating a
tax-collection forecast in the
course of preparing the state
budget; monitoring tax collection
and the implementation of tax
policy during the year; and initiating
and promoting
proposals for changes in the tax
system as part of the government's
economic policy, including the
handling of tax legislation. The
Administration is also in charge
of tax research and provides the
public with current information on
tax collection. The Administration
coordinates the interministrial committee on government offices'
fees. It conducts discussions with
other governments to conclude
double-taxation treaties (see
Appendix). Finally, the
Administration monitors
macroeconomic developments,
advises the Ministry
administration in this regard, and
publishes information on the
topic.
(b)
Income Tax and Property Taxation
Division
The Division collects direct
taxes, property taxes, and Value
Added Tax from nonprofit
organizations and financial
institutions.
The Division is headed by Income
Tax Commissioner. The Division has
twenty seven regional assessors'
offices, nine regional
property-tax offices, four
investigation offices, and three
bailiffs' units. The Income Tax
Commission is composed of staff
departments headed by the Vice
Commissioner and deputy
commissioner who are in charge of
operations in their spheres of
responsibility. The departments
are Administration and
Organization, Assessments and
Economics, Investigations,
Professional Division, Legal
Division, Deductions system,
Collections and Intelligence,
Property Taxation, Internal
Auditing and Bookkeeping, and
Bailiff's Service.
The Division operates on the basis
of laws, regulations, and
directives including the Income
Tax Ordinance, the Property Tax
and Compensation Fund Law, laws
that encourage specific economic
activities (such as the
Encouragement of Capital
Investments Law), and the Tax
(Collection) Ordinance, to name
only a few.
In 1998, individual taxpayers
filed 368,000 tax returns
(including 50,000 employees and
85,000 corporate managers who are
required to file returns), as did
111,000 corporations (including
75,000 going concerns).
In 1998, the Division had 3,052
permanent employees and used 6,225
month of temporary labor.
(c) Customs and Value Added Tax
Division
The Customs and Value Added Tax
Division collects indirect taxes
on goods and services (with the
exception of VAT on nonprofit
organizations and financial
institution). The Division is also
in charge of applying and
enforcing import rules. It derives
its powers mainly from the Custom
Tariffs and Exemptions Ordinance
and the Customs and Excise Taxes
(Modification of Tariffs) Law,
among other statuses.
Changes in customs tariffs are
made by means of orders that the
Minister of Finance is authorized
to issue. Under certain
conditions, these orders require
approval of the Knesset Finance
Committee.
The Division is composed of an
administration and following field
units: seven customs houses,
seventeen VAT and purchase-tax
units, and five investigation
units. In 1998, the Division's
labor force (1,700 permanent
employees and 3,400 month of
temporary labor) handled some
350,000 businesses.
(d) Computer Service System
(Shaam)
The Computer Service System is
auxiliary unit of the Finance
Ministry, subordinate to the
Economic Research and State
Revenue
Administration, that develops and
manages computer information
systems that serve the Ministry
and its tax divisions.
The Division has 2,000 employees.
It is composed of an
administration and the following
field units: seven customs houses,
seventeen VAT and purchase-tax
units, and five units for
investigations.
2.Additional
Government Offices that Engage in
Collection
In addition to the Ministry of
Finance, various government
ministries - Transport, Justice,
Interior, etc. - apply and collect
fees. The main fees pertain to
driving and motor and motor
vehicles, court fees and fines,
and so on. Most of the revenues
from these fees are routed to the
state budget; a smaller pertain is
earmarked for the ministries that
collected them. All fees require
the approval of the Minister of
Finance and the relevant Knesset
committee before they are set. The
Minister of Finance approves
changes in fees after that are
discussed by an interministrial committee headed by the Director
of the Economic Research and State
Revenue Administration.
(a) National Insurance Institute
The national Insurance Institute
collects compulsory payments under
the National Insurance Law
(Consolidated Version), 5755 -
1995, and the taxes set forth in
the State Health Insurance Law,
5754 - 1994. The Institute is
supervised by the Minister of
Labor and Social Affairs, who
implements the National Insurance
Law and is authorized to introduce
regulations based on it.
The Minister heads the
fifty-member National Insurance
Council, in which labor
organizations, management
organizations, government
ministries, and the public are
represented. The Administration is
the managing and executive
authority of the National
Insurance Institute. The Institute
has nineteen branches and sixty
sub-branches countrywide. It had
3,300 employees in 1998.
(b) Municipal Authorities
Municipal authorities collect municipal
property taxes, fees,
and betterment charges for
properties in their areas of
jurisdiction. Each authority has
its own tax administration.
(c) Other Statutory Entities
Additional statutory entities,
such as the Israel Broadcasting
Authority and the Ports and
Railroads Authority, are
allowed to charge various fees and
duties. This chapter does not
discuss these payments
A. Income
Tax and Property Tax Division
1. Income Tax and Capital Gains Tax
Four types of taxes apply to income
and capital:
(a) income
tax;
(b) capital-gains
tax;
(c) payroll
tax;
(d) property
taxes.
(1)
Personal Income Tax
Personal income tax is computed in
the following way; of all the
taxpayer's income from all sources,
tax-exempt income and deductions
(including allowable expenses) bare subtracted
and (for the
self-employed only) losses are
offset. On the remaining income,
i.e., the taxable income, the tax
function (brackets, rates, etc.,) is
applied and the tax liability is
obtained. Credits are subtracted from the tax liability. The
remainder is personal income tax.
Tax Base
Personal income tax is imposed on
individuals' taxable income that was
accrued in, derived, or received in
Israel from
the following sources:
1. ...work income, including income
from a salary, a business, a
vocation, various types
...... allowances, and additional
income originating in taxpayer's
past work. Income derived
...... from abroad is not liable to
personal income tax in Israel unless
it is received in Israel and
...... unless the taxpayer practices
the same vocation in Israel or was
sent abroad by an Israeli
...... employer;
2. ...non-work (passive) income,
including income from interest and dividends, property rental,
...... royalties, and so on;
3. ...income from a random
transaction.
All individuals are assessed as
separate units, on the condition
that the sources of the spouses'
earned income are not
interdependent. When interdependence
in source of income is present, the
spouses are taxed jointly.
Main Types of Tax-Exempt Income
1. ...Work income of the blind and
the disabled up to NIS 38,100 per
month, and unearned
...... income up to NIS 4,560 per
month.
2. ...Benefits from the Ministry of
Defence and National Insurance
Institute (except for
...... maternity allowances and
unemployment compensation).
3. ...Interest on saving plans.
4. ...Gains from the sale of
securities - unless they are the
income of a business or derived
...... from a random transaction of
commercial nature.
5. ...Employers' contributions to
employees' advanced-training funds,
at 7.5 percent, are
...... tax-exempt from the
employee's standpoint up to a
maximum wage of NIS 14,400 per
...... month. If the employer's
contributions are kept with the
found for six years without
...... interruption, or for a
shorter period that they are
withdrawn for specific purposes
...... stipulated in the law (e.g.,
study), the withdrawal (including
indexation differentials,
...... interest, and other gains) is
tax-exempt.
6. ...Withdrawals of employer's
contributions from provident funds.
7. ...Withdrawals from provident
funds for severance pay confer a tax
exemption for one
...... month's income per year of
work up to an income ceiling of NIS
9,190 per year of work.
...... In cease of death, the
exemption ceiling for severance pay
is doubled.
8. ...Withdrawals from pension funds
are tax-exempt on 35 percent of the
pension up to a
...... qualifying allowance ceiling
of NIS 6,300 per month. The
non-exempt is taxable
...... at regular rates.
9. ...Lottery winnings and prizes
from parties other than employers.
Deductions from Income
1. ... Employer's allowable expenses
- 8.33 percent of pension-base
income that is deposited
...... with a severance-pay fund and
5 percent of income deposited with a
provident fund, or 6
....... percent deposited with a
pension fund. In the event of
benefit-type contributions, the tax
...... benefit is limited to a
qualifying income ceiling of NIS
9,200 per month.
2. ... For wage income that does not
continue a pension base, employees
who contribute to
...... provident funds are given a 5
percent deduction on income up to a
qualifying income
...... ceiling of NIS 9,200 per
month.
3. ... Self-employed taxpayers who
contribute to provident are given a
7 percent reduction on
...... income up to a qualifying
income ceiling of NIS 9,200 and up
to 11 percent of income
...... (up to the aforementioned
ceiling) for contributions to
pension funds.
4. ... Allowable expenses that are
incurred in order to produce income
- e.g., depreciation,
...... motor-vehicle expenses, per
diem, and research and development -
are tax-exempt.
...... A small portion of employees'
expenses are allowable.
5. ... Personal health-insurance
premiums (not including dental
insurance) are tax-exempt.
6. ... 52 percent of national
Insurance contribution expenses of
self-employed are tax-exempt.
7. ... In 1996, contributions to
advanced-training funds for the
self-employed became tax-
...... deductible. The rate of the
benefit has risen gradually and
peaked in 1998, when,
..... 7 percent of income could be
set aside (up to a ceiling of NIS
196,000 per year) at a
..... deduction of 4.5 percent.
Personal
Income - Tax Rates and
Brackets-Monthly Income, 1999
(NIS and Percent)
|
Tax
Bracket
|
Monthly
income
|
Percent
|
|
|
Minimum
(NIS)
|
Maximum
(NIS)
|
|
|
(1)
|
0
|
1,920
|
10
|
|
2)
|
1,921
|
3,830
|
20
|
|
(3)
|
3,831
|
10,100
|
30
|
|
(4)
|
10,101
|
18,300
|
45
|
|
(5)
|
18,301
|
18,301
and above
|
50
|
These brackets and rates apply only
to earned (work) income.Unreaded
taxable income is taxed at an
initial rate of 30 percent and
thence at the other brackets that
apply to the taxpayer's earned
income (45 percent and 50 percent)
after the earned and unearned
incomes are added together. Other
kinds of unearned (passive) income
are taxed at a limited uniform rate.
For example, dividend income and
income derived from abroad are taxed
at 25 percent and interest on bonds
and capital gains from the sale of
foreign securities are taxed at 35
percent.
Since the 1995 fiscal year,
individuals who have reached the age
of 60 have paid an initial tax rate
of 10 percent on all types of income
(earned and other). Their remaining
income is taxed at the regular rates
shown in Table VI-1.
Limited Tax Rates
The types of income listed below are
taxable at rates irrespective of the
tax brackets that apply to the
taxpayer's other income:
1. ... Income from dividends of
publicly-owned corporations - 25
percent.
2. ... Income from dividends of
Approved Enterprises under the Encouragement
of Capital
....... Investments Law - 15
percent.
3. ... Income up to NIS 6,870 per
month from rental of dwellings to
individuals is
....... tax-exempt. Income exceeding
this sum is subtracted from the sum
of the exemption
....... sum. In other words, the tax
exemption ceiling of NIS 6,870 per
month. Accordingly,
....... a monthly income from
residential rental that exceeds NIS
13,740 per month us taxable
....... at the regular income-tax
rates, with an initial bracket of 30
percent.
4. ... If a dwelling is rented to a
corporation for which the Income Tax
Commissioner has not
....... approved the aforementioned
exemption, the rent income is liable
to a tax rate of 10
....... percent. The income ceiling
that creates an entitlement to the
reduced tax rate of 10
....... percent is NIS 6,800 per
month. If the rate income exceeds
this sum, the entire rent
....... income taxed at the regular
income-tax rates, with an initial
rate of 30 percent.
5. ... Under certain conditions,
key-money income of individuals and
corporations is taxed at
....... a limited rate of 35
percent.
6. ... Mutual funds and foreign
securities - see section from and
reductions on capital-gains tax.
Tax Credits
Most credits are given in the form
of credit points, sometimes up to a
credit ceiling or a qualifyinf-income
ceiling, but
never greater than the pre-tax
liability. Each credit point is
worth NIS 165 per month in 1999, and
starting January 1, 1997,
credit points are adjusted on J
Since January 1, 1997, credit points
are adjusted on January 1 of each
year.
... The credits are listed below:
|
1.
|
Every
Israel-resident taxpayer is entitled to 2.25 credit points.
|
|
2.
|
Since
fiscal year 1996, women have been entitled to a further half
credit point.
|
|
3.
|
Married
persons with non-working spouses are entitled to an additional
credit point.
|
|
4.
|
Working
mothers of children under 18 are entitled to one additional
credit point for each child. They are
entitled to only half a credit point per child during the year
of the child's birth, and in the year in which
the child reaches age 18.
|
|
5.
|
Newly arrived immigrants are entitled to three additional credit
points in their first eighteen months in the
country, two additional credit points in the following year, and
one credit point in the next successive year.
|
|
6.
|
Individuals
with dependent children (divorcees, widows/widowers, and
single-parent families) are entitled to one
additional credit point on the grounds of being the heads of
single-parent families.
|
|
7.
|
Contributions
o provident funds, made out of wage income that is included in
the taxpayer's pension base, confers
a tax credit of 35 percent. The contribution is limited to 5
percent of qualifying income up to NIS 9,200 per month.
|
|
8.
|
Contributions
to provident funds from wage and work income that is not
included in the taxpayer's pension base give
the worker (employee or self-employed) a tax credit of 25
percent of the contribution not taken into account for
deduction.
|
|
9.
|
Charitable
donations are given a 35 percent credit up to 30 percent of
taxable income or NIS 451,000 whichever is lower.
The smallest allowable contribution is NIS 350. If the donor is
eligible for a deduction on account of research and
development expenses, the combined deduction and credit shall
not exceed 50 percent of his/her taxable income.
|
|
10.
|
A 15
percent tax credit is given for shift work, up to a maximum
credit of NIS 700 per month. However, the credit is not
awarded for the portion of the shift wage that, after added to
the regular wage, results in a monthly income exceeding
NIS7,960.
|
11. Residents
of specific localities are given tax credits irrespective of where the
income is derived from
Specific Localities and Income-Tax Credits and Reductions
(NIS and Percent)
|
Locality
|
Migdal
ha-'Emeq
|
Ofaqim,Safed,
Tiberias, Karmiel, Sederot, 'Arad, etc.
|
Misc
localities, mainly over the Green Line
|
Yeroham,Mitspe
Ramon,
Eilat
|
Northern
border localities (except Qiryat Shemona)
|
Qiryat
Shemona
|
|
Rate of
reduction (%) (2)
|
3
|
5
|
(3)
|
10
|
15
|
20
|
|
Maximum
qualifying income
|
NIS
6,935 per month
|
NIS
6,535 per month
|
NIS
6,935 per month
|
NIS1
10,100 per month
|
without
a ceiling
|
NIS
179,400 per year(4)
|
Notes
to the table:
|
1.
|
Residents
of Eilat also receive a credit for taxable income from a
business or vocation on account of income
generated in the Eylot area. Residents of Eilat can chose between
this benefit, or instead get 7% credit up to
a ceiling of NIS 10,100 income. Residents of Mitspe Ramon are eligible
to chose as an alternative a 25% reduction
for income (excluding dividends, interest, capital gains, and
income originating in real estate) derived in and near
Mitspe Ramon. The maximum credit is NIS 3,360 per month. In this
alternative, there are special rules for calculating
tax reductions
|
|
2.
|
The
tax reduction is a credit set at a certain percent of taxable
income as shown in the table
|
|
3.
|
In
most localities where a 7 percent reduction is offered, it is
also given to "teaching workers"
and "medical workers" who produce most of their earned
or vocational income in these localities,
even if they do not dwell there. People who practice these
occupations in Beit She'an or Qiryat
Shemona are also entitled to the 7 percent reduction even if
they do not live there
|
|
4.
|
A
discount of only 10 percent is given for income exceeding this
limit
|
Personal Earned
Income Tax, 1996 - 1999;Upper Limits of Brackets, Value of Credit Point,
and Tax Threshold,
and Ceiling of Benefits (NIS, current prices, and in percent)
Percent
|
|
Year
|
Month
|
|
:
|
1996
|
1997
|
1998
|
1999
|
1999
|
|
Tax
rates on earned income
|
Upper
limit of income-tax brackets (NIS)
|
|
10
|
...
|
19,640
|
21,240
|
23,040
|
1,920
|
|
15%
|
37,900
|
...
|
...
|
...
|
...
|
|
20%
|
...
|
39,360
|
42,480
|
45,960
|
3,830
|
|
30%
|
99,760
|
103,560
|
111,960
|
121,200
|
10,100
|
|
45%
|
180,740
|
187,680
|
202,920
|
219,600
|
18,300
|
|
50%
|
180,741
|
187,681
|
202,920
|
219,600
|
18,800
|
|
and
above
|
and
above
|
and
above
|
and
above
|
and
above
|
and
above
|
|
|
|
|
|
|
|
|
Credit-point
value
|
1,633
|
1,692
|
1,836
|
1,980
|
165
|
|
|
Total
tax according to number of credit points
|
|
2.25
|
24,495
|
28,875
|
31,272
|
33,792
|
2,816
|
|
2.75
|
29,938
|
33,105
|
35,856
|
38,700
|
3,225
|
|
3.25
|
35,382
|
37,335
|
40,455
|
43,680
|
3,640
|
|
3.75
|
39,363
|
40,830
|
43,416
|
47,724
|
3,977
|
|
|
Ceilings
for income-tax benefits
|
|
Income
qualifying for provident-fund benefits
|
90,600
|
93,600
|
102,000
|
110,400
|
9,200
|
|
Allowance
qualifying for 35% exemption
|
62,150
|
64,560
|
69,840
|
75,600
|
6,300
|
|
Exemption
for retirement grant (1)
|
7,320
|
7,850
|
8,490
|
9,190
|
.....
|
|
Income
ceiling for advanced-training fund purposes (employees)
|
158,000
|
160,800
|
168,000
|
172,800
|
14,000
|
Notes
to the table:
|
(1)
|
The
maximum allowable retirement benefit per year of work, as of
January in the relevant year.
Only in 1996 was the ceiling adjusted during the year.
|
(2) Corporate Income Tax
The Income Tax
Ordinance defines the taxable income corporations and allows them to
deduct various expenses that are in structured in order to generate
income.
Tax Base
The tax base is the same as that of personal-income tax. Taxable income
is adjusted to the rate of increase of the Consumer Price Index as set
forth in the Income Tax (Inflationary Adjustments) Law, which stipulates
the method of adjustment. The decline in inflation in the past few years
has made this adjustment less important.
Tax Rate
|
(1)
|
Ordinary
corporations are
taxed at 36 percent.
|
|
(2)
|
Corporations
with foreign investment are
taxed at 10-25 percent, commensurate with their proportion of
foreign investment.
|
|
(3)
|
Approved
Enterprises under
the Encouragement of Capital Investments Law (ECIL) pay
corporate tax at a rate of 25 percent.
|
|
(4)
|
The
alternative track for Approved Enterprises gives
such enterprises a tax exemption for two years, six years, or
ten years, depending on their location (investment area). The
alternative track is available to Approved Enterprises (as
defined in the (ECIL) that forgo an investment grant.
|
The following
amendment went into force in 1999:
Since 31.1.99, the exempt value from land-betterment tax from the sale
of two dwellings, was raised to NIS 1,500,000, according to the
conditions stated in Paragraph 49(e)(2), as mentioned above.
Also, there was awarded a partial exemption for the selling of two
dwellings a combined value of up to NIS 2,500,000, according to the
conditions stated in Paragraph (e)(a1) of the Land Betterment Tax Law.
Ceiling will be updated at the beginning of each year according to the
raise in the Consumer Price Index
Main Tax Exemptions and Reductions
|
Deductible
expences: payroll, raw materials, depreciation, interest,
research and development, etc.
|
|
Research
and development expenses are recognized as expenses for the year
in which they are incurred.
|
|
Approved
Enterprises mat deduct an accelerated rate of depreciation.
|
|
Ordinary
firms are exempt from tax on dividend earnings paid out of
ordinary income on which corporate tax has already been paid.
Approved Enterprises are liable to a 15 percent tax on dividends
that they distribute to individuals.
|
Tax
Base
Real capital gains from the sale of
business assets and
securities.Securities traded on the
stock exchange are exempt from
capital-gains tax, except:
(a)... securities that are racorded
in the books of account of the
taxpayer's business.
(b) ... securities held by
individuals who are deemed by the
tax assessor to be a part of the
business.
(c) ... securities held by corporate
principals (persons with 10 percent
or greater stake in share equity).
Tax Rate
The initial tax rate on personal
real capital-gains income is 30
percent; the other tax rates (45
percent and 50 percent) are identical
to ordinary income-tax rates on
earned income, commensurate with the
taxpayer's bracket after the real
capital gain is added to his/her
other income.
Personal "inflationary
gains" created up to the end of
1993 are taxed at 10 percent.
Inflationary gains generated since
financial 1994 have not been taxed.
Since 1995, the initial tax rate on
real capital gains of individuals
aged 60 and over has been 10
percent.
Corporations' capital gains are
taxed at corporate tax rate of 36
percent.
Exemptions and Reductions
Individuals' real capital gains from
the sale of mutual funds and foreign
securities traded on foreign
exchanges are taxed at a flat rate
of 35 percent.
Employer's
Tax
Base Wage payments of
public instructions, nonprofit
organizations, and corporations
whose entire income is exempt from
income tax.
Tax Rate
Employers' tax is charged at 4
percent.
There
are three types of property taxes:
(1) ... land-betterment tax;
(2) ... teal estate purchase tax;
(3) ... property tax.
(1)Land-Betterment Tax
Tax Base
Capital gains from the sale of real estate.
Tax Rate
The same rates that apply to capital gains.
Exemptions and Reductions
1. ... Land-betterment tax for real estate acquired up to 1948 is paid
only 12 percent. On real estate acquired between 1949and 1960, 1 percent
par year is added.
2. ... Government institutions and National Institutions are exempt from
tax on the sale of real estate.
3. ... Sale of a residential dwelling is exempt from land-betterment tax
once every four years.
Changes in Land-Betterment Tax Law Pertaining to Sale of Dwellings
The following amendments went into force in 1997:
1. ... If the dwelling sold in the seller's only dwelling, and if he/she
did not own more than one dwelling simultaneously during the four years
preceding the sale, the seller may invoke the land-betterment tax
exemption if he/she has not sold his/her only dwelling 18 months before
the aforementioned sale.
2. ... The sale of two dwellings with a combined value of up to NIS
1,298,000 (in the course of 1998) is exempt from and-betterment tax once
in the taxpayer's lifetime, as stated in . Paragraph 49(e)(2) of the
Land Betterment Tax Law, 5723-1963. The value ceiling is adjusted at the
beginning of each year by the rate of increase in the Consumer Price
Index.
..... The exemption is awared on the condition that the person selling
the two dwellings has purchased during the year preceding the sale of
the second dwelling, or will purchase in the year following said sale,
another dwelling that is worth at least 75 percent of the value of both
sold dwellings.
3. ... A dwelling unit that does not meet the criteria of "eligible
residential dwelling", as sated Paragraph 49(e)(2) of the Land
Betterment Tax Law, 5723-1963, is not exempt from land-betterment tax at
point of sale. Most dwellings are used for business purposes, as either
rented or owned premises. This provision went into effect in January
1998.
4. ... The Minister of Finance, per approval of the Knesset Finance
Committee, is entitled to deem a dwelling used for educational or
religious purposes as a dwelling used for residential purposes, the sale
of which is exempt from land-betterment tax.
(2) Real-Estate Purchase Tax
Tax Base
The tax is applied to the price of purchase of real estate (dwellings,
Farmsteads buildings, businesses buildings, and land). Its rates follow:
Real-Estate
Purchase Tax Rates
(NISand percent-as of April 16, 1999)
|
Type
of property
|
Minimum
price
|
Maximum
price
|
Percent
of purchase price
|
|
Dwelling
|
0
|
424,855
|
0.5
|
|
|
424,856
|
659,405
|
3.5
|
|
|
659,406+
|
|
4.5
|
|
|
|
|
|
|
Farmstead
|
0
|
203,566+
|
0.5
|
|
|
203,566+
|
|
5.0
|
|
|
|
|
|
|
Business
building and land
|
|
|
4.5
|
The real estate purchase tax brackets are adjusted quarterly by the rate
of increase of the housing purchase price index. The Knesset recently
amended the Real-Estate Purchase Tax Law, effective January 1, 2000, to
raise the maximum tax rate from 4.5 percent to 5 percent on all types of
properties. The amendment also eliminates the first tax bracket (0.5
percent for the purshase of a dwelling by one who already owns at least
one dwelling, so that these dwellings will be taxed in the 3.5 percent
and 5 percent brackets.
Exemptions and Reductions
1. ... Real estate acquired by National Institutions, as listed in
Paragraph 4 of the Land-betterment (Real-Estate Purchase Tax)
Regulations, 5735 - 1975, are exempt from real-estate purchase tax, as
is real estate acquired by foreign countries, as stated in Paragraph 15
0f the Regulations.
2.... For acquisition of dwelling, building, or business, and for
acquisition of land for construction for residential or business
purposes (all of which up to a maximum value) by persons who have
immigrated to Israel in the past seven years, real- estate purchase tax
is applied at the limited rate of 0.5 percent. The ceiling, set at NIS
995,260 in April 1999, is adjusted on a quarterly basis commensurate
with the increase in the housing purchase price index. Beyond this
ceiling, the tax rate is 4.5 percent.
3. ... Municipal
authorities that acquire real estate that does not generate income pay real-estate purchase tax at 0.5 percent.
4.... The statutory corporations listed in Paragraph 3 of the
Land-Betterment Tax Regulations (Real-Estate Purchase Tax),
5735-1975-including the National Insurance Institute, the Ports and Rail roads
Authority, Yard Vashem, Magen David Adom(emergency services),
and other in the same class - pay real-estate purchase tax at 0.5
percent.
5.... Real estate acquired by public institutions for immediate or
future use is liable to real-estate purchase tax at 0.5 percent.
6.... Real estate by disabled army veterans and beraved parents is
liable to real-estate purchase tax at 0.5 percent. This may be invoked
twice in one's lifetime.
7.... Businesses that relocate to development areas pay real-estate
purchase tax at 0.5 percent.
(3) Property Tax
Tax Base
Undeveloped land other than farmland or land used for agriculture.
Valuation is performed by the tax authorities every few years and is
adjusted once annually.
Tax Rate
1.2 percent per year on land that serves as business inventory for
income-tax purposes.
2.5 percent per year on all other land.
By decision of the Knesset, property tax will bw abolished on January 1,
2000, and replaced by a 2.5 percent sales tax on land and business
premises. Building contractors only will pay an 0.8 percent sales tax on
new dwellings; this tax is recognized as an expense for income-tax
purposes.
Exemptions and Reductions
|
Governmental
and public institutions, National Institutions, and United
Nations agencies are exempt from property tax.
|
|
A
landowner who builds one dwelling unit on his/her land is exempt
from property tax for 30 months from the beginning of
construction.
|
|
Land
acquired before 1948 is qualified for a deduction of NIS 84,000
per dunam. The deduction is given for up to ten dunand only.
|
|
Landowners
whose holdings generate a total annual tax liability smaller
than NIS 300 are exempt.
|
|
Fruit
orchards on non-agricultural qualify for a valuation deduction
of NIS 70,000 per dunam for tax purposes.
|
Collection and Enforcement
(a) Personal Taxes
The tax year coincides with the calender year. Ninety
percent of personal
income tax is collected by withholding at source or by advance payments.
Income tax on wage and on supplementary payments (dividends, interest,
writers' fees, act) is withheld at source by the employer of the party
that paid income.
Self-employed taxpayers are liable to advance payments, usually as a
percent of the previous month' turnover. The percentage is set as the
ratio between the tax liability and the taxpayer's turnover as indicated
in his/ her most recent known tax return. At the end of the tax year,
when annual tax returns are filed, the income-tax authorities perform a
final reckoning with these taxpayers.
When taxpayers have income from more than one source, tax is withheld at
a 50 percent rate from the remaining sources unless they ask the tax
assessor for a lower rate.
The law requires all payers of personal income tax to file returns, but
most taxpayers are exempt from this requirement.
Taxpayers whose income is derived from abroad will be required to file
returns starting with the 1999 tax year. Accordingly, those who generated
some or all of their income abroad shall file returns in
early 2000 0n their 1999 income.
The main exemptions from the general reporting requirement pertain to
the following:
|
Israel-resident
individuals who derive all of their income from wage or rent,
and/or other sources, provided that tax on their income was
withheld at source and their
total income in these categories
did not exceed the following levels in 1998:
(a)... Wage or rent income: NIS 460,000
(b)... Additional income: NIS 240,000 or upto half of total
personal income from wage and rent, whichever is lower.
their
total income in these categories
did not exceed the following levels in 1998:
(a)... Wage or rent income: NIS 460,000
(b)... Additional income: NIS 240,000 or upto half of total
personal income from wage and rent, whichever is lower.
|
|
Resident
individuals who derive all of their income from sources other
than work, a business, or a vocation, provided that their total
income does not exceed a sum three times that of the credit
points for which they are eligible during that tax year.
|
|
Nonresidents
are exempt from filing if their income was derived or accrued
in
Israel, on the condition that (a) tax was withheld at source and
(b)their income originates in a business or vocation that was
active in Israel for up to 180 days during the tax year and said
income is classified as wage, interest, dividends, or royalties.
accrued
in
Israel, on the condition that (a) tax was withheld at source and
(b)their income originates in a business or vocation that was
active in Israel for up to 180 days during the tax year and said
income is classified as wage, interest, dividends, or royalties.
|
In any event, whenever a tax assessor orders individuals to declare
their income in a tax return, they must do so.
(b) Corporations
Ordinarily, the corporate tax year coincides with the calendar year.
Companies must file tax returns that are confirmed by a CPA and must
present the tax authorities with a financial opinion within five months
of the end of the tax year. Corporations must pay tax advances on
account of the current tax year and must have tax withheld at source for
work they perform for others.
Companies make advance payments on account of income tax in two ways:
1. as a percent of turnover, determined on the basis of the last year
for which the company filed a tax return, and additional advance
payments for various non-deductible expenses;
2. as a defined amount. For example, banks make advance payments on the
basis of their most recent known tax return, adjusted by the Consumer
Price Index.
(c) Land-Betterment and Capital-Gains Tax
A 50 percent advance
payment is usually charged on account of land-betterment or
capital-gains tax; this advance is payable immediately after the sale of
the asset. A final assessment is made after the taxpayer files his/her
annual return, in which all income is reported.
A 50 percent advance payment is usually charged on account of
land-betterment or capital-gains tax; this advance is payable
immediately after the sale of the asset. A final assessment is made
after the taxpayer files his/her annual return, in which all income is
reported.
The
Customs and VAT Division collects
most indirect taxes- those that
apply to manufactures in respect to
the manufacture, sale, purchase, or
use of goods and services.
Manufacturers record these taxes as
current production expenses. In most
cases, these taxes apply to
consumption by final consumers.
1. Taxes on
Domestically Generated Goods and
Services
This category includes four types of
taxes: Value Added Tax, purchase
tax, fuel excise, and stamp tax.
(a) Value Added Tax
(1) VAT on
Private and Public Consumption
Tax Base
VAT is applied to the difference
between businesses' total sales
turnover (including random sales)
and their purchases of inputs and
capital goods. In practice, the tax
applies to private and public
consumption. The tax base excludes
investments and exports but includes
imports meant for consumption.
Notwithstanding this, public-sector
investments are VAT-liable.
Tax Rate
VAT is applied at a flat rate of 17
percent.
Exemptions and Reductions
|
1.
|
A
zero rate of VAT (in which
the business need not pay on
transactions but is entitled
to a refund of tax paid on
inputs) applies to exports,
incoming tourism, sales of
fresh produce, international
cargo forwarding, and sales
of aircraft and marine
vessels to businesses that
engage in passenger and
cargo transport by sea or by
air.
|
|
2.
|
An
exemption is given (without
eligibility for refund of
tax paid on inputs), for a
term not exceeding
twenty-five years, for
leasing of dwellings and
transfer of real estate for
key money.
|
|
3.
|
The
Eilat Law: most sales in
Eilat are exempt from VAT
(except for cigarettes and
several consumer durables
such as motor vehicles, TV
and stereo sets, VCRs, and
video cameras). Sales by
vendors outside city limits
to customer within city
limits are also exempt from
VAT if the vendors are
active in Eilat. Tourism
services are exempt from VAT
in parts of the Eylot area.
|
|
4.
|
Newly
arrived immigrants and
returning Israelis are
exempt from VAT, as
explained in the section on
important taxes (below).
|
(2) VAT on
Nonprofit Organizations.
Tax Base
Wage payments by nonprofit
organizations (including central
government).
Rax Rate
A flat rate of 8.5 percent is
charged.
(3) VAT on
Financial Instructions
Tax Base
Wage payments are profits of
financial instructions (banks,
insurance companies, ect.).
Tax Rate
A flat rate of 17 percent is
charged.
(4)
Purchase Tax
Tax Base
Tax Base
Purchase tax applies to the
wholesale price of final consumer
goods and a small number of raw
materials and intermediates.
Tax Rate
Between 5 percent and 95 percent,
depending on the product.
Exemptions
Various products meant for
education, health, industry, and
agriculture are given a conditional
exemption (based on use) from
purchase tax.
Purchase Tax on Cigarettes
The purchase tax on cigarettes (both
domestic and foreign manufacture) is
55 percent of consumer price, not
including VAT, plus NIS 1.024 per
pack.
(5) Fuel
Excise
Tax Base
A flat-rate tax applies to all types
of fuel.
Fuel Excise Rates, Selected Types
of Fuel
NIS per thousand liters, as of
January 1, 1998)
|
Type
of fuel
|
Tax
rate
|
|
91-octane
gasoline
|
2,019
|
|
96-octane
gasoline
|
2,019
|
|
95-octane
unleaded gasoline
|
2,019
|
|
Diesel
fuel at filling station
|
107
|
|
Kerosene
at filling station
|
70
|
(6) Stamp
Tax
Tax
Base
The tax applies to various documents
such as contracts, official papers,
notes, and bonds.
Tax Rate
0.4 percent to 3 percent.
Exemptions and Reductions
Various contracts pertaining to
agreements with the government, and
labor contracts, as listed in an
appendix to the law.
2. Import
Taxes
Three
kinds of taxes are imposed on
imports:
(a)
Customs;
(b) Purchase tax;
(c) Value Added Tax.
(1)
Customs
Tax Base
Customs are applied to the CIF value
of imports (import value including
shipping and insurance) of groups of
products imported from "third
countries," i.e., those with
which Israel does not have Free
Trade Area agreements. Israel has
FTA agreements with Canada, the
Czech Republic, E.F.T.A., the EU
countries, Hungary, Poland,
Slovakia, Slovenia, Turkey, and the
United States.
Tax Rate
Customs tariffs range from 8 to 20
percent of CIF import value. In the
program that liberalized imports
from "third countries,"
declining tariffs were imposed on
various product groups. (See Chapter
XIV for details.
Exemptions and Reductions
1. Imports from countries with which
Israel has FTA agreements are
exempt, as stated above.
2. Imports of ships, aircraft,
diamonds, and many other
products-foremost inputs and
intermediates-are customs-exempt.
3. Newly arrived immigrants and
returning Israelis are given an
exemption from customs (and from
purchase tax and VAT) for a list of
products elaborated and set forth in
the Purchase Tax (Exemption) Order,
5736-1975. The list is comprehensive
for immigrants (including private
motor vehicle) and less so for
returning Israelis. The list is
updated from time to time.
Immigrants from "distress
countries" (as shown on a list)
receive a "tax-exemption
grant" (NIS 11,472 per
household, on average) and are fully
tax-liable for all products (except
for a VAT exemption on purchase of
furniture).
4. Various products meant for
education, health, industry, and
agriculture are given a customs
exemption conditional on use.
(2)
Purchase Tax on Imports
Tax
Base
The computed CIF value of imports,
plus tariffs, plus the percent-quota
supplement on certain products.
Starting in January 1991,
"arrangement importers"
(importers who meet certain criteria
and carry out a quantity of imports
stipulated in the law) have been
given the option of determining
their tax base in view of their
actual profit margin instead of a
computed percent-quota supplement.
Tax Rate 5-95 percent,
depending on the types of products.
Exemptions and Reductions
Newly arrived immigrants and
returning Israelis are given
exemptions and reductions, as
explained above.
(3) Value
Added Tax
Tax
Base
Imported goods and services, on the
basis of the CIF price, plus
customs, plus purchase tax.
Tax Rate
uniform tax rate of 17 percent is
applied.
Exemptions and Reductions
Identical to the VAT exemptions and
reductions applying to domestic
manufacture. Newly arrived
immigrants and returning Israelis
are exempt from VAT as explained
above.
3.
Collection and Reporting
VAT
is paid on a monthly for large
businesses, or bimonthly basis by
those liable to it. Input tax is
refunded on a current basis during
the year. On domestic manufacture,
the vendor is the party liable to
purchase tax. On imports, the
importer becomes liable at the point
where the goods are released from
inspection of the Customs Authority.
Fuel excise is remitted directly by
the Israel National Oil Refineries.
The
Basis for Payment of Fees Various
government ministries charge
miscellaneous fees for licenses or
services that they provide.
Level of Fee
Fees are compulsory payments, not
taxes, for which the payer receives
something in return-although not
necessarily in direct proportion-for
his/her money. Most fees are
adjusted automatically once or twice
a year, commensurate with increases
in the Consumer Price Index.
Exemptions and Reductions
In limited cases, a reduction or
exemption is awarded on the basis of
ability to pay, type of payer (e.g.,
a reduced motor-vehicle license fee
for ambulances), etc.
Collection and Enforcement
The revenue from most fees collected
by government ministries is
forwarded to the state exchequer. A
small portion is earmarked to fund
the revenue-dependent expenditure of
the offices that collect them. Since
1992, the Economic Arrangements Law
has prohibited the imposition of new
earmarked fees.
The
National Insurance Institute
collects National Insurance
contributions and health tax.
1. National
Insurance Contributions
Tax Base
Earned income of employees and the
self-employed. Spouses are liable to
National Insurance contributions in
accordance with their own income.
Insured persons who also have an
income from unearned sources
(passive income, such as that from
rent or interest) are charged
National Insurance contributions
under certain conditions, up to an
income ceiling.
The maximum taxable income for
National Insurance remittances is
four times the national average wage
(NIS 23,924 per month). This ceiling
is adjusted at the beginning of each
year and whenever a Cost-of-Living
Allowance is given.
Non-working adults are charged a
reduced sum.
Tax Rate
National Insurance contributions for
employees are remitted by employees
and employers alike.
There are two brackets for National
Insurance contributions:
1. A reduced rate up to half the
national average wage (NIS 2,991 per
month).
2. A regular rate, applying to
income over half the national
average wage up to the income
ceiling for National Insurance
contributions.
National
Insurance Contribution and Health
Tax Brackets, for Employees,
Employers, and the Self-Employed
(Percent of Income as of January 1,
1999)
|
|
Employees
|
Self-employed
|
|
|
Regular
|
Reduced
|
Regular
|
Reduced
|
|
National
Insurance Contributions
|
|
|
|
|
|
Employee
|
4.90
|
2.66
|
9.62
|
5.72
|
|
Employer
|
4.93
|
4.93
|
-
|
-
|
|
Health
tax
|
4.8
|
3.1
|
4.8
|
3.1
|
Exemptions
and Reductions
1. Various population groups are
exempt from National Insurance
contributions for different types of
coverage. For examples, career
soldiers are exempt from maternity
insurance and foreign workers are
absolved from National Insurance
contributions except for workers'
compensation, maternity, and
bankruptcy. Married homemakers who
do not work outside their homes are
exempt from National Insurance
contributions but become eligible
for old-pensions at the age of
sixty.
(a) Health
Insurance
Tax
Rate
Most imports of industrial products
are totally customs-exempt under
Israel's Free Trade Area accords
with the European Common market, the
United States, E.F.T.A., and others.
Where customs are in effect, they
usually range from 8 to 20 percent
and apply to imports of certain
groups of products from "third
countries" (those with which
Israel does not have FTA
agreements). (See Chapter 14 for
details.)
Phase 7 in the liberalization of
competing imports from "third
countries" was carried out on
September 1, 1997. In most
categories of imports, the process
was completed on September 1, 1996,
the tariff set at its final level of
8-12 percent. The process is
continuing for several sensitive
industries.
The lumber industry will reach its
final destination in September 1998,
when the maximum tariff will settle
at 8-12 percent. The footwear,
fertilizer, sheet class, ceramics,
and electric motor industries will
also complete the liberalization
process in September 1998. Textiles
will finish the process in September
2000. The exposure of industrial
products to competing imports did
not include agriculture and
processed food. These industries
embarked on the process on January
1, 1998, in the context of applying
the recent GATT accord, which Israel
signed in 1994. (See Chapter 14 for
details.)
Free Trade Area agreements with
Poland and Hungary were concluded in
the course of 1997 and went into
effect in the beginning of 1998.
Under these agreements, Israel will
eliminate customs on industrial
products within four years. Over the
past two years, FTA accords were
concluded with additional countries,
including Canada, Turkey, the Czech
Republic, and Slovakia.
Exemptions and Reductions
|
1.
|
Imports
of ships, aircraft,
diamonds, and many other
products-foremost inputs and
intermediates-are
customs-exempt.
|
|
2.
|
Recent
immigrants and returning
Israelis are given a customs
exemption for a list of
products elaborated and set
forth in the Purchase Tax
Order (Exemption),
5736-1975. The list is
updated from time to time.
(Immigrants who receive a
"tax-exemption
grant" are ineligible
for the tax exemption on
refrigerators, cooking
ranges, and washing
machines, because they are
given a monetary grant in
lieu of this tax relief. In
January 1998, the level of
the grant was NIS9,692.
|
|
3.
|
Under
Israel's agreements with the
European Common Market, the
United States, and E.F.T.A.,
most products are
customs-exempt.
|
|
4.
|
Various
products meant for
education, health, industry,
and agriculture are given a
conditional customs
exemption.
|
(b)
Purchase Tax on Imports
Tax Base
The CIF value of imports, plus
tariffs, plus the percent-quota
supplement as computed to reflect
the importer's profit spread.
Starting January 1991,
"arrangement importers"
(importers who meet certain criteria
and carry out a quantity of imports
stipulated in the law) have been
given the option of determining
their tax base in view of their
actual profit margin instead of a
computed percent-quota supplement.
The percent-quota supplement was
also abolished on several products
not manufactured in Israel, and the
purchase rate applying to these
products was raised concurrently.
Tax Rate
5-95 percent.
Exemptions and Reductions
Exemptions and reductions are given
to students, returning Israelis, and
recent immigrants. For recent
immigrants, see further details in
Section (a), "Customs,"
above.
(c) Value
Added Tax
Tax Base
Imported goods and services, on the
basis of the CIF price, plus
customs, plus purchase tax. A
uniform tax rate of 17 percent is
applied.
Exemptions and Reductions
See schedule of exemptions under
"Value Added Tax on Domestic
Manufacture."
VAT and Customs Division
Administration
Value Added Tax, which generates
most of the Division's revenues, is
paid on a monthly or bimonthly basis
by those liable. VAT refunds for
deduction of VAT paid on inputs are
given on a current basis throughout
the year.
Purchase taxes on products are built
into the price of the products.
On domestic manufacture, the vendor
is the party liable to purchase tax.
On imports, the importer becomes
liable at the point where the goods
are released from inspection of the
customs authority.
Fuel excise is remitted directly by
the refineries.
A.
OTHER
GOVERNMENT MINISTRIES-CHARGING AND
COLLECTION OF FEES
Other
government ministries collect
miscellaneous fees applying to
licenses (motor vehicles, firearms,
banks, insurance companies,
physicians, engineers, insurance
agents, and others) or special
services provided by government
agencies (passports, drivers'
licenses, inoculations, etc.) and
are set by law.
The Basis for Payment of Fees
Fees are usually based on the cost
of the service tendered.
Most fees are adjusted automatically
several times a year. The adjustment
of each fee is set forth in a
special regulation based on the law
of relevance to it. Several fees are
set forth at fixed rates in the law;
they are adjusted only when the law
that stipulates their rate is
amended.
Exemptions and Reductions
In most cases, the state is exempt
from fees. However, there are
exemptions. For example, even
government ministries pay
motor-vehicle licensing fees.
The law allows the minister in
charge to award an exemption (in
full or in part) and to anchor it in
regulations. For example, technical
institutes and associations for
relief and charity are charged a
minimal motor-vehicle licensing fee.
The institutions that benefit from
this tax relief are listed in the
regulations.
Collection and Enforcement
Fees are collected by fourteen
government ministries. A few of them
are earmarked for funding of
operations of the ministry that
collects them (court fees, several
Ministry of Agriculture fees, etc.)
but the revenue from most fees
collected by government ministries
is forwarded to the state exchequer.
B.
NATIONAL INSURANCE
This
section is divided into two parts:
(a) National Insurance contributions
from employers and employees;
(b) Employee remittances for health
insurance.
(a) National Insurance
Contributions
Tax Base
Earned income of wage-earners and
the self-employed. Spouses are
liable to National Insurance
contributions in accordance with
their own income. Insured persons
who also have an income from
unearned sources (passive income,
such as that from rent or interest)
are exempt from National Insurance
contributions if such income
accounts for less than 50 percent of
their total income; when passive
income surpasses this proportion,
it, too, becomes liable to National
Insurance contributions.
The maximum taxable income for
National Insurance remittances is
four times the national average
wage. This ceiling is adjusted
whenever a cost-of-living allowance
is given and at the beginning of
each year. The National Insurance
ceiling as of January 1998 was
NIS22,420.
National Insurance contributions
for wage-earners are remitted by
employees and employers alike. The
government makes a payment to the
National Insurance Institute in
order to reduce their labor costs of
employers, who in the past had paid
this portion.
The self-employed remit
National Insurance contributions for
themselves (as employees and as
employers). Citizens who do not have
National Insurance contributions
deducted from their wages are also
liable to payment, as are persons
who do not work, Israelis residing
overseas, and so on.
Tax Rate
National Insurance contributions are
applied in two brackets:
(1) A reduced tax bracket for income
up to half of the average wage per
employee post (NIS2,803 per month).
(b) A regular tax bracket for income
exceeding half of the average wage
per employee post.
National
Insurance Contribution and Health
Tax Brackets, for Wage-Earners and
the Self-Employed
(Percent of Income)
|
|
Wage-earner
|
Self-employed
|
|
|
Regular
|
Reduced
|
Regular
|
amily:"Trebuchet
MS"">Reduced
|
|
Employee
|
4.90
|
quot;">2.66
|
|
|
|
Employer
|
4.93
|
4.93
|
9.62
|
5.72
|
|
Health
tax
|
4.8
|
3.1
|
4.8
|
3.1
|
Exemptions
and Reductions Exemptions
and Reductions
1. Various population groups are
exempt from National Insurance
contributions for different types of
coverage. For examples, career
soldiers are exempt from maternity
insurance and foreign workers (from
abroad and from the territories) are
absolved from National Insurance
contributions except for workers'
injury, maternity, and bankruptcy.
2. Men over age 65 and women over
age 60 who receive old-age pensions
are exempt from National Insurance
contributions, but men aged 65-70
and women aged 60-65 who continue to
work and earn wages-who are
ineligible for old-age pensions (if
their monthly income exceeds NIS
3,409 per month for individuals and
NIS 4,546 for couples)-are liable to
contributions.
3. Married homemakers who do not
work outside their homes are exempt
from National Insurance
contributions but are eligible for
old-age pensions upon reaching age
65.
4. Non-work income is exempt from
National Insurance contributions if
it accounts for less than 50 percent
of the insured's income. Otherwise,
it is fully liable to National
Insurance contributions.
2. Health
Tax
Tax Base Tax
Base
The base of health tax is identical
to that of National Insurance
contributions.
Tax Rate
See Table VI-6 above.
3.
Collection and Reporting
Employees-It is the
employer's duty to report and
forward payments on account of
National Insurance contributions and
health tax. Employees who work for
more than one employer must also
report to the National Insurance
Institute. Employees-It
is the employer's duty to report and
forward payments on account of
National Insurance contributions and
health tax. Employees who work for
more than one employer must also
report to the National Insurance
Institute.
Self-employed-The
self-employed make quarterly advance
payments on account of National
Insurance contributions on the basis
of their last known income. The
payments are adjusted in view of
changes in the national average
wage. After the income-tax
authorities make the final tax
assessment, a final reckoning is
done.
1.
Municipal Property Tax
Tax
Base
Municipal property taxes are applied
to all types of real
estate-dwellings, business premises,
industrial buildings, and so
on-except for undeveloped land. To
determine the tax base, different
municipal authorities give different
consideration to the size and
economic value of the property, the
taxpayer's socioeconomic condition,
and other variables. For example,
one authority uses net area (not
including interior walls) as the
basis for taxation of dwellings, and
another uses gross area including
areas jointly held with neighbors.
Tax Rates
Tax rates vary among different
municipal authorities and types of
properties. Each authority has
maximum and minimum rates.
Exemptions and Reductions
The law allows municipal authorities
to award exemptions and reductions
as they see fit, usually in view of
socioeconomic situations.
Authorities must give an exemption
or a reduction in certain cases,
e.g., government offices and senior
citizens receive a reduction.
2.
Fees
Municipal authorities charge fees
for various services that they
provide, foremost in construction,
development, sewage, and business
licensing.
3. Property Betterment Charge
Betterment is the increase in the
value of a property due to rezoning;
this increase is charged at a 50
percent rate.
Tax Base
The increase in the value of a
property due to rezoning by the
municipal authority.
|
General Section
