International Tax Accountant in Jerusalem

International Taxation in Jerusalem — Who Does This Apply To?

If you are a business owner or self-employed person in Jerusalem with foreign income, an employee who received a foreign grant, or a new immigrant who must report foreign assets — you are exactly in our area of expertise. International taxation is not something that can be ignored. The Israeli Tax Authority requires full disclosure of income, assets, and accounts abroad, and violations can be severe.

At our Jerusalem office, we see business owners and employees every day who did not know they were required to report foreign bank accounts or foreign employment income. This mistake can cost you far more than planning ahead would.

Ben Or Kook Certified Public Accountants in Jerusalem specializes in comprehensive guidance for clients in the field of international taxation — from annual reporting in Israel to filing reports abroad, smart tax planning, and avoiding costly mistakes.

What Exactly Is International Taxation?

International taxation deals with the question: if you have income or assets abroad, how much tax do you owe in Israel? Do you also have to pay tax abroad? How do you prevent double taxation?

In Israel, every resident is subject to tax on worldwide income — meaning everything you earn in the world, whether in Israel or abroad. It does not matter if your bank account is abroad or your employer is abroad. If you are an Israeli resident — you are required to report.

This reporting is divided into several obligations:

• Annual reporting in annual report or provisional report — detailed foreign income.
• FBAR reporting — if you have a foreign bank account with a balance above a certain threshold, you must notify the Tax Authority.
• FATCA reporting — international reporting of foreign assets to foreign authorities (if you are a foreign resident or have foreign connections).
• Foreign tax laws — in addition to Israel, you may be required to pay tax in the country where the income originates.

This sounds complicated? This is usually what causes our clients in Jerusalem to call. And the good news is that there are legitimate ways to resolve this correctly.

Who Needs Guidance on International Taxation?

Business owners and self-employed persons in Jerusalem — if you have a self-owned business and foreign income, or work for a foreign company, you need professional guidance. Reporting can be complex, and a certificate or foreign tax withholding can affect your tax calculation in Israel.

Employees with secondary foreign income — if you work in Israel but have additional foreign income (freelancing, investments, rental), you must report it on your annual report. Many of our employees in Jerusalem are unaware that they are entitled to a tax refund.

New immigrants — if you recently moved to Israel, you must report foreign assets that remain with you (homes, bank accounts, investments). Israeli tax law requires full disclosure, and mistakes at this stage can be problematic.

Business owners with foreign operations — if your Jerusalem-based company has foreign income or investments abroad, you need professional guidance in international tax planning and proper reporting to the Tax Authority.

Holders of foreign bank accounts — this also includes employees who have a foreign bank account for work or savings purposes. Reporting is mandatory, and tax law is strict on this matter.

International Reporting Stages — How Does the Process Work?

When a new client comes to us at Ben Or Kook in Jerusalem with questions about international taxation, we work according to a structured process. This ensures that we don't forget any reporting and that your reports will be accurate.

Stage 1: Complete Information Collection

First, we ask detailed questions: Where do you have income? What type of income? Do you have bank accounts abroad? Property? Investments? What are the balance amounts? Are you a resident abroad or just working there? Do you have an employment contract abroad?

This information is fundamental. Without it, we cannot provide correct advice.

Stage 2: Verification of Reporting Obligations

Based on the information we collected, we check which reports you are required to file:

• Annual report or advance report in Jerusalem with details of foreign income.
• FBAR reporting if you have a bank account abroad.
• Capital declaration reporting if you have property abroad.
• Reports in other countries, if required (depending on tax laws there).

Every client is different, and their obligations depend on their specific circumstances.

Stage 3: Tax Planning and Utilizing Benefits

After understanding the situation, we investigate whether there are benefits or legal ways to reduce the tax burden. For example:

• Are you entitled to double taxation relief through a treaty between Israel and another country?
• Can you transfer expenses abroad to reduce taxable income?
• Are you entitled to a tax refund due to a deduction abroad?

Many business owners in Jerusalem are not aware that they have such rights. That's exactly what we're here for.

Stage 4: Report Preparation and Tax Authority Filing

When everything is clear, we prepare the reports accurately. Every number, every detail is checked. We submit the reports to the tax authority on your behalf, and we remain in contact with the authority if there are questions or audits.

Stage 5: Ongoing Support

International taxation is not something you do once and then forget. Every year there is new reporting, and your circumstances may have changed. We stay in touch and check on you each year before the filing deadline.

Common Mistakes in International Reporting — and How to Avoid Them

Ben Or Cook in Jerusalem sees the same mistakes over and over again. They are not necessarily intentional, but they can be costly. Here's what you need to know:

Mistake 1: Failure to Report a Foreign Bank Account

This is the most common. A business owner in Jerusalem opened a foreign bank account for work or savings, and simply forgot or did not know they had to report it. When the tax authority discovers it (and usually it does, due to international reporting), it can lead to significant financial penalties.

The Solution: Report it immediately. If you are behind, it is better to handle it now than to wait for the tax authority to discover it.

Mistake 2: Incorrect Calculation of Foreign Income

Foreign income must be converted to shekels at the exchange rate of the day of income (or at an average rate, depending on circumstances). If the currency of the country where you work has strengthened or weakened, it affects the amount of your income in shekels. Many make mistakes in conversion or use the wrong rate.

The Solution: Keep all documentation of rates, payments, and invoices. We use the official tax authority exchange rates.

Mistake 3: Failure to Report Foreign Expenses

If you are self-employed in Jerusalem and have expenses related to foreign income (such as office rental, communication fees, consultation), you can deduct them from your income. But many do not do this because they do not know it is permitted or because they do not keep receipts.

The Solution: Keep every expense related to foreign income. We will help you account for it properly.

Mistake 4: Failure to Report Taxes Paid Abroad

If you have paid taxes abroad on your income (foreign tax withholding), you can generally claim a foreign tax credit in Israel. But for that you need to report it correctly and present certificates from the foreign tax authority.

The Solution: Collect all notices of taxes paid abroad. We will handle the claim for foreign tax credit.

Mistake 5: Misunderstanding Foreign Reporting Obligations

If you are a resident abroad but still a resident of Israel (for tax purposes), you may be required to file reports in both countries. Foreign filing may be different from filing in Israel, and reporting requirements may be more complex.

The Solution: Check with an accounting firm or tax advisor abroad what your obligations are there. We can help coordinate the filings.

International Taxation in Jerusalem — Practical Cases

Let's look at a few real-world examples that will help you understand whether you need guidance on this matter.

Case 1: Self-Employed Individual in Jerusalem with Foreign Income

Israel, a self-employed programmer in Jerusalem, works for a foreign company. He receives a monthly salary in dollars to a foreign bank account. He didn't know he was required to report it. When he came to us, we discovered he also had not reported his foreign bank account.

What we did: We prepared an annual tax return detailing all his foreign income (converted to shekels), an FBAR report on the bank account, and claimed a foreign tax credit for taxes withheld abroad. He received a significant tax refund, and now reports annually as required.

Case 2: Employee in Jerusalem with Foreign Investments

Sarah is an employee in Jerusalem, paid in shekels, but has an investment portfolio abroad (stocks, closed-end funds). She received dividends from abroad and did not know she needed to report this on her annual tax return.

What we did: We reviewed the dividend amount, added it to her income on the tax return, and claimed a foreign tax credit for taxes withheld abroad. Sarah received a tax refund of several hundred shekels, and was also brought into compliance going forward.

Case 3: New Immigrant in Jerusalem with Foreign Property

David immigrated to Israel from abroad a year and a half ago. He still owns a house abroad (but does not live in it). He did not know he was required to report it in Israel.

What we did: We prepared a declaration of assets detailing the foreign property, its value (per our appraisal), and checked whether he had income from the property (rental or expenses). We also advised him on tax planning for the future sale of the property (if he planned to sell it).

Case 4: Company in Jerusalem with Foreign Operations

A Ltd. company in Jerusalem has a branch abroad that exports products. The branch is not a separate company, but part of the Israeli company. The company did not report the branch income correctly.

What we did: We reviewed all branch income, determined the foreign taxes paid, and prepared a proper annual tax return for the company detailing its foreign income. We also advised on a better tax structure (for example, establishing a foreign subsidiary under certain conditions).

When Should You Consult an Accountant About International Taxation?

Not every case requires professional guidance, but there are clear signs that you need help. Here's when you should call us at Ben Or Kok in Jerusalem:

If you have foreign income. This is a red flag. Foreign income requires accurate reporting, conversion to shekels, and potential complications with double taxation relief. Don't try to handle this alone.

If you have a bank account or property abroad. Reporting is mandatory, and mistakes here can be costly. We streamline the reporting process.

If you are a new immigrant to Israel. Reporting in Jerusalem differs from reporting abroad, and you need to understand the new requirements. We help new immigrants navigate the system.

If you are self-employed or employed with secondary foreign income. This may affect your tax calculation in Israel and also your eligibility for a tax refund. It's worth checking.

If the tax authority has contacted you with questions about international reporting. This is the time to get professional help. We can represent you in communications with the tax authority.

If you're unsure what your obligations are. This is the best thing you can do. A complimentary initial consultation with us at Ben Or Kok in Jerusalem will clarify what needs to be done.