The following new changes/ updates will go into effect Jan 1st. 2011:
1. The 101 tax form that all employees and pensioners are required to fill out each year has been updated. The new form now includes details in section D on income from scholarships (which are exempt from income tax but must be declared).
2. Section 8 of the 101 form (requests for exemptions and reductions) now includes a new clause for returning citizens, who can receive extra tax credit points provided they check this box and they have a valid "returning citizen" document which is issued by the Ministry of Absorption. A photocopy needs to be attached to the 101 form.
3. Change in V.A.T. law. The reduction in V.A.T. from it’s current rate of 16% to 15.5 % has been delayed until Jan 2013. This still doesn’t mean anything as it still needs to be approved in the bi-annual state budget for 2013-2014. As for now – no change.
4. Starting in Jan 2011 any payment of subsistence pay (eshel) will no longer be exempt from tax and will not be recognized as a deductable expense by the Israeli Tax Authorities.
5. The minimum annual amount for contributions to charity has been raised to 310 shekels and the maximum has been updated to 7,636,000 shekels.
Moshe Egel-Tal, CSPP
Founder and CEO, Israpay "making payroll simple"
Site: http://www.israpay.com
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