Income Tax Ordinance [New Version]

Where a body of persons has deducted tax from interest or from a dividend and that interest or dividend, or part thereof, is included in the income of the recipient thereof, the tax deducted shall be set off against the tax imposed on his income.

Every person who pays or is responsible for the payment of employment income, including a portion of a grant received on account of retirement or death that is not exempt under section 9(7a), of earnings or profit originating from gambling, lotteries or prize-bearing activities, as referred to in section 2a, of an amount received on account of the commutation of a pension that is not exempt under sections 9a or 9b, or of amounts and payments to which section 18(b) applies and which constitute income in the hands of the recipient, or of income under section 2(5) or of amounts and payments to which section 3(h7) applies, or of taxable income transferred by a real estate investment trust as defined in section 64a2 to its shareholders, or of consideration as its meaning in section 88, or of interest or a dividend, or of any other income which the Minister of Finance, with the approval of the Finance Committee of the Knesset, has prescribed by Order, shall deduct at the time of payment from the amount paid tax in the manner and at the rates prescribed; however, the Minister of Finance may prescribe, in respect of earnings or profit as referred to in section 2a, that the deduction of tax shall be as he prescribes, even if not at the time of payment and not from the amount paid; this provision applies also to the State.

"income subject to deduction" – payments prescribed under section 164 as income for the purposes of that section, as detailed below:

"Electronic Signature Law" – (Repealed)

"approved electronic signature", "electronic certificate" – (Repealed)

"secured electronic signature" – (Repealed)

"employee" – excluding an employee working in the private household of an individual;

"exempt dealer" – (Repealed)

A person who disputes the correctness of the assessment under section 167 may, within two weeks, submit to the assessing officer a written objection, and the provisions of sections 150–158 shall apply as if the objection had been submitted pursuant to those sections; the amount of tax determined under the assessment by an order pursuant to section 152(b) or on appeal pursuant to section 153 shall be paid within seven days from the date of service of the notice of assessment, or from the date of the giving of the order or judgment, all as the case may be, or at another time prescribed in the Regulations.

A person who has deducted tax under section 170(a) is required to pay to the assessing officer, within seven days from the date on which he made the deduction, the amount of tax deducted and to submit to him a return in which he shall state the name and address of the person to whom or on whose behalf the income was paid.

The amount of the deduction under section 170 shall be set off – for collection purposes – against the tax to be imposed on the person who received the said income.

Where a person who is required under the provisions of this Section to deduct tax has not deducted the amount, in whole or in part, or has not submitted a return as referred to in section 171, or has submitted one but the assessing officer has reasonable grounds to believe that the return is incorrect, the assessing officer may assess, according to his best judgment, the amount of tax that person was required to deduct, and an assessment under this section has the same effect as an assessment under section 145; the assessing officer may assess a person as referred to in this section within the period during which he is entitled to determine, according to his best judgment, the amount of the taxable income of that person for the tax year in which he was required to deduct the tax; such assessment does not exempt that person from any other liability under the Ordinance.

for the purposes of paragraphs (1) and (2), "deduction of tax at source" – deduction of tax pursuant to sections 161, 164 or 170.

The last date for the submission of a return under this Chapter shall be postponed if in the five days preceding that date there were at least three rest days, and it shall be on the fourth weekday after the end of the consecutive rest days; for this purpose, "rest days" – the rest days established in the State of Israel as their meaning in section 18a(a) of the Law and Administration Ordinance, 5708-1948, as well as intermediate festival days.

In this Section –

"the determining year" – the last tax year in respect of which the taxpayer's income was assessed up to the first of January of a tax year, whether or not an objection was submitted.

Spouses shall be regarded, for the purposes of this Section, as a single taxpayer; nothing in this provision shall derogate from the provisions of section 66a.

for this purpose, "transaction turnover" – the total of all transactions as their meaning in the Value Added Tax Law, 5736-1975, excluding sales to which Part 5 or the Land Taxation Law applies.

Where the amount of tax for the determining year is in dispute but exceeds the amount of tax most recently determined by a final determination, the advance payment shall be computed according to the amount of the tax for the determining year that is not in dispute or according to the amount of tax so determined, whichever is the greater;

"final determination", in this section – a determination that is not open to objection or appeal.

The Minister of Finance may, by Order, increase or reduce the rate of the advance payments under this Section, alter the dates of their payment, or prescribe that the advance payments shall be made once every two months or once in every other period that the Minister shall prescribe; the Minister may also prescribe different advance payment rates for different determining years, and, with the approval of the Finance Committee of the Knesset – for each of the advance payments within the tax year or for different categories of taxpayers.

A taxpayer who had taxable income and was not previously liable to pay tax, or was not previously assessed, shall pay the advance payments under sections 175 or 176, as the case may be, as a percentage of the estimated tax amount that the taxpayer may, according to the taxpayer's estimate, be liable for in the tax year on that income, and shall submit to the assessing officer together with the first payment a declaration of the said estimated tax and a further declaration six months after the submission of the first declaration; if the taxpayer did not submit such declarations, or submitted such declarations and the assessing officer has reasonable grounds to believe that the declarations are incorrect, the assessing officer may determine, to the best of the assessing officer's judgment, the amount of the advance payment that that taxpayer is required to pay, and a determination as aforesaid shall, for the purposes of objection and appeal, have the same status as an assessment under section 145.

The Minister of Finance, with the approval of the Finance Committee of the Knesset, may prescribe in Regulations discounts to be granted to a person who paid advance payments under this Section before the date prescribed for their payment or to a person who paid advance payments in an amount exceeding that due from the person, all at the rates and subject to the conditions prescribed, whether generally or for a particular category of taxpayers.