Income Tax Ordinance [New Version]

A liquidator or receiver appointed by a court or under any law in force in Israel, as well as a trustee, guardian of the person or of property, or a committee, in whose hands is the direction, control or management of property or an enterprise on behalf of a legally incompetent person, shall be liable to tax in the manner and amount in which that person would have been liable had that person not been legally incompetent.

A non-resident, whether or not an Israeli national, shall be assessable and chargeable in the name of that person's trustee, guardian, or committee, or in the name of an attorney, authorised agent, agent, receiver, branch or manager, whether or not they are the recipients of the income, all in the manner and amount in which that person would have been assessed or charged had that person been a resident of Israel and that income had come into that person's hands.

A non-resident shall be assessable and chargeable in respect of income derived, directly or indirectly, from a power of attorney, from agency, from authorisation, from receivership, from a branch or from management, or through any one of these, and shall be assessable and chargeable in the name of that attorney, agent, authorised agent, receiver, branch or manager, as the case may be.

The master of a vessel whose owner or charterer is a non-resident chargeable under sections 71–74 shall be deemed to be the authorised agent of that non-resident for the purposes of this Ordinance, without excluding any other authorised agent of that non-resident.

Where a non-resident transacts business with a resident and the assessing officer considers that, by reason of the close connection between the two and the effective control held by the non-resident over the resident, it is possible that the course of business between them may be arranged, and it is arranged, in such a manner that the business carried out by the resident, as a result of that person's dealings with the non-resident, does not yield to that person any profit, or yields less than the ordinary profit to be expected from such business – the non-resident shall be assessable and chargeable in the name of the resident as if the resident were that person's authorised agent.

A non-resident who effects sales or transactions with other non-residents in circumstances that would render that person liable under sections 110 and 111 in the name of a resident — that fact alone does not render that person liable in respect of any earnings or profits derived from the said sales or transactions.

Where a non-resident has been charged to tax in the name of an attorney, agent, authorised person, receiver, branch or manager in respect of earnings or profits derived from the sale of goods or products manufactured or produced outside Israel by that non-resident, the person in whose name the non-resident has been charged may apply to the assessing officer to make the assessment in respect of that income, or to amend it, on the basis of the profits that, on a reasonable assumption, would have been made by a trader or retailer purchasing as aforesaid directly from the manufacturer or producer — had the goods or products been sold by them or on their behalf at retail — and after the amount of those profits has been proved to the satisfaction of the assessing officer, the assessment shall be made or amended accordingly.

Nothing in sections 108–114 shall render a non-resident liable to tax in the name of a broker or general commission agent or other agent in respect of earnings or profits derived from a sale or transaction effected by them, if they are not authorised persons acting habitually under the authority of the non-resident, or if they are not authorised persons within the meaning of sections 110–112.

A person who is assessable and liable in respect of a legally incapacitated person, or a person in whose name a non-resident is liable, shall be responsible for everything required to be done under this Ordinance for the assessment of the income of the person on whose behalf that person acts and for the payment of the tax charged thereon.

The manager or any other principal officer of an incorporated body of persons shall be responsible for the doing of all those acts and things required to be done under this Ordinance for the assessment of that body of persons and for the payment of the tax.

A person who has received, from any power whatsoever, money or money's worth constituting income from one of the sources specified in this Ordinance and belonging to a person who is liable in respect of that income, or who would have been liable in respect of it had that person been a resident of Israel and not a legally incapacitated person, shall prepare and submit, whenever the assessing officer demands it by notice and within the time specified in that notice, a list signed by that person containing a true and correct declaration of all the said income and the name and address of every person to whom the income belongs; the provisions of this Ordinance regarding failure to submit lists and particulars pursuant to a notice from the assessing officer shall apply to such a list.

A person who is liable under this Ordinance to pay tax on behalf of another person may retain out of monies coming into that person's hands on behalf of that other person any sum sufficient to pay the said tax; and that person is hereby indemnified against any person in respect of any payment made by virtue of and under this Ordinance.

"tax debt" — as its meaning in section 195a, excluding a debt of advance payments;

"final tax debt" — a tax debt in respect of which there is no longer any right of objection, appeal or further appeal;

"relative" — as defined in section 88;

"controlling shareholder" — a person who, alone or together with a relative, holds at least twenty-five percent of any of the rights listed in the definition of "controlling shareholder" in section 32(9)(a);

"office holder" — an active manager, partner or controlling shareholder.

In this Part —

"index" — (deleted)

"average index" — (deleted)

"basic index" — (deleted)

"social discounts" — the amount specified in section 9(5), the amounts specified in section 9(7a), the amount specified in section 9(16a), (16b) and (18a), the amount exempt under section 9(20), the ceiling of the qualifying annuity as defined in section 9a(a), the amount specified in section 17(5a), the amount specified in section 32(9), the amount specified in section 44(a)(1) as the ceiling of the amounts in respect of which a credit shall be allowed, the amounts specified in section 45a, the amounts specified in section 47, the amount specified in section 58a(c) and the amounts specified in section 125d;

"recognised donation amounts" — the amounts specified in section 46(a);

"qualifying annuity" — (deleted)

"income ceilings" — the income amounts for the purpose of determining the rates of tax under section 121 and also taxable income subject to additional tax, as its meaning in section 121b.