International Tax Accountant in Afula

International Taxation — Who Does It Apply To?

Not every freelancer or business owner needs advice on international taxation. But if you fall into one of the following categories — the time to start planning is now:

• New immigrants to Israel — If you have immigrated in recent years and have assets, bank accounts, or investments abroad, the Israeli tax authority will expect you to report them.
• Freelancers or self-employed individuals — If you have income from clients abroad, commissions from international platforms (such as Airbnb, Amazon, eBay), or digital services from abroad.
• Ltd. company owners — If your company employs workers abroad, has branches or investment portfolios abroad.
• Owners of foreign assets — A house, land, investments, a bank account, or even cryptocurrency abroad — all of these require reporting.
• Employees with additional income — If you received a grant, permission from abroad, or temporary work abroad — this affects your tax reporting.

What is important to remember: international reporting is not something you can "patch up" during the year. You need to plan it in advance, understand the tax implications, and be informed about your reporting obligations in Israel.

What Exactly Does International Taxation Include?

International taxation is not just "reporting foreign income." It is an entire set of obligations, reports, and professional opinions that must be managed carefully.

FBAR Reporting — An Important Obligation Often Overlooked

If you have a foreign bank account (even if it is small or inactive), and its balance exceeded a certain amount at any point during the year — you are required to report this to the Israel Tax Authority. This reporting is called FBAR (Foreign Bank Account Report), and it is separate from your regular annual report. Did you forget to report? This can be very costly.

Report on Foreign Assets

A house, land, foreign stock market investments, investment funds, or even accumulated value in a foreign pension — all of these require special reporting. This reporting is part of your annual report, but requires separate forms and accurate documentation.

Tax Treaty and Double Reporting

When you have foreign income, you may pay taxes both in Israel and in the country where the income was generated. To avoid paying tax twice on the same money, there are international agreements (tax treaty) between Israel and various countries. Our firm helps you understand the relevant agreement and file the correct report.

Foreign Income Reporting

All income you received from abroad — salary, commissions, dividends, interest, capital gains — must be included in your annual report to the Tax Authority. The reporting should be in the contract currency, but with conversion to shekels at the relevant exchange rate.

Common Scenarios — and How We Help

Let's look at some real cases we've handled:

Scenario 1: Self-Employed Professional Processing Payments Through Stripe or PayPal from Abroad

A self-employed consultant helping foreign businesses with digital consulting services received income through Stripe and PayPal. He didn't know he needed to report every dollar received, nor did he understand the implications for tax advance payments. We updated him on proper reporting, calculated the advance payments, and helped him avoid penalties.

Scenario 2: Employee Who Received a Substantial Family Gift from Abroad

An employee received a substantial family gift from abroad. He assumed gifts were not subject to tax in Israel — but the source of the gift affects the reporting requirements. We examined the international agreement, understood his situation, and filed proper documentation that saved him significant worry with the tax authorities.

Scenario 3: New Immigrant with Property Abroad

A new immigrant to Israel still owns a home in his country of origin. He didn't know he needed to report the property to the Israeli tax authorities, nor did he understand the implications regarding capital gains tax if he decides to sell. We understood his situation, reported the asset, and planned with him what will happen if he decides to sell.

Scenario 4: Private Company with a Foreign Branch

An Israeli company opened a branch abroad. The company management didn't know separate reporting to the Israeli tax authorities was required, nor did they understand the implications for consolidated financial statements. We prepared comprehensive financial statements, reported the foreign branch, and planned the company's international taxation for the coming years.

Common Mistakes in International Reporting — and How to Avoid Them

In our work with clients in Afula and the surrounding area, we have seen recurring mistakes. Here are the mistakes you should avoid:

• Failure to Report FBAR — A small foreign bank account, or an account that was emptied at the end of the year, does not exempt you from the reporting obligation. FBAR reporting is a separate obligation from the annual tax return, and forgetting it can be very costly.
• Failure to Report Foreign Assets — A house, land, or investment abroad must be reported in the annual tax return. When not reported, it looks like evasion, and it can raise red flags with the tax authority.
• Incorrect Currency Conversion — When reporting foreign income, you must convert the currency to shekels at the relevant exchange rate (usually the bank rate on the transaction date). Incorrect conversion or using an arbitrary rate can cause problems with the tax authority.
• Misunderstanding of tax treaty — If there is an international agreement between Israel and the country where you received income, you can avoid double reporting. However, you must file the correct forms and prove your eligibility for tax benefits.
• Failure to Report Commissions or Dividends — Foreign income does not always come as salary or self-employment income. Sometimes it is dividends, commissions, or capital gains. Each type of income requires different reporting and can affect your tax.
• Incorrect Count of Days of Residence — new immigrants need an accurate calculation of days of residence in Israel. A miscalculation can affect your tax status for the entire year.

Why Ben Or Kook Law Firm in Afula?

International taxation is a complex field, and standard accounting software will not suffice. You need professional expertise, practical experience, and meticulous attention to detail.

At Ben Or Kook, we work with freelancers, business owners, companies, and new immigrants who require guidance on international tax matters. We understand Israeli law, international tax treaties, and the common mistakes that often lead to complications. Our service is digital and accessible — you can work with us from home, or meet us in Afula, Petach Tikva, or Ben Or Kook in Afula.

Each case is examined individually. We do not apply one-size-fits-all solutions — we listen, understand, and plan together with our clients.