Upcoming
Qualifying-pension exemption rises to 67%
The last step in section 9A's gradual schedule: the exemption on qualifying pension income reaches 67% of the qualifying-pension ceiling, up from 62.5% in 2027.
- Employees
Services:Tax Consulting
What changed
What changed in Israeli regulation – and how it affects you
A timeline of income tax, VAT, National Insurance and privacy changes from 2024 through the numbers already known for 2027. Every value links to its official source and to the guide that explains what to do.
2028
2027
- Upcoming
The 2027 numbers already known
The credit point stays at 242 ILS a month and the surtax threshold at 721,560 ILS (frozen). The exemption on qualifying pension income rises to 62.5%. The monthly VAT reporting threshold is expected to rise to 1,805,000 ILS, per a secondary source pending the Tax Authority table. The 2027 osek patur ceiling has not been published yet.
- Employees
- Self-employed
- Osek patur
- Monthly VAT reporting threshold
- was
1,775,000 ₪now 1,805,000 ₪ - Source: כל זכותSecondary source – not yet published officially
- Credit point (monthly)
- now 242 ₪
- Source: לוח ניכויים 2026 – חוק ההתייעלות (הקפאת עדכוני מס ומס יסף) 26.12.2024
Services:Tax Consulting
2026
Allocation-number threshold drops to 5,000 ILS – final stage
From 1 June 2026 allocation numbers are required on every tax invoice from 5,000 ILS before VAT. Per the directive there is no further stage in 2027. Make sure your invoicing software is connected to the Tax Authority.
- Self-employed
- Companies
Services:BookkeepingRepresentatives' extension scheme for 2025 returns published
Unrepresented individuals must file the 2025 annual return by 29.5.2026 (paper) or 30.6.2026 (online); companies by 31.7.2026. Clients of a CPA under the extension scheme: individuals by 28.2.2027, companies by 31.3.2027, subject to the firm's filing quotas.
- Self-employed
- Companies
- Final date, represented individuals
- now 28.2.2027
- Source: רשות המסים – הסדר האורכות למייצגים 2025 (28.4.2026)
- Final date, represented companies
- now 31.3.2027
- Source: רשות המסים – הסדר האורכות למייצגים 2025 (28.4.2026)
Osek patur ceiling rises to 122,833 ILS
The annual turnover ceiling for an osek patur was updated to 122,833 ILS. Crossing it means registering as an osek murshe and charging VAT. The threshold for monthly (vs bi-monthly) VAT reporting was updated to 1,775,000 ILS at the same time.
- Osek patur
- Self-employed
- Monthly VAT reporting threshold
- was
1,725,000 ₪now 1,775,000 ₪ - Source: רשות המסים – סכומים מעודכנים במע"מ
Allocation-number threshold drops to 10,000 ILS
From the start of 2026 allocation numbers are required on tax invoices from 10,000 ILS before VAT (VAT directive 01/2025). This now affects most self-employed who invoice businesses.
- Self-employed
- Companies
Services:BookkeepingDividend alternative for trapped profits rises to 6%
To avoid the undistributed-profits tax, the minimum dividend out of accumulated profits rose from 5% in 2025 to 6% from 2026 on.
- Companies
Services:Tax ConsultingNational Insurance for the self-employed 2026: new average wage and ceilings
The average wage for National Insurance purposes was updated to 13,769 ILS a month. The reduced rate (7.7%) applies up to 7,703 ILS a month and the full rate (18%) above it, up to the income ceiling (51,910 ILS). Advance payments are adjusted accordingly.
- Self-employed
- · announced March 30, 2026
20% and 31% tax brackets widened (retroactive to January 2026)
The 2026 Economic Efficiency Law widened two brackets: the 20% bracket now ends at 228,000 ILS a year (was 193,800) and the 31% bracket at 301,200 ILS (was 269,280). Employers were asked to correct withholding from January; employees who were not corrected can claim the difference in a return.
- Employees
- Self-employed
2025
Amendment 13 to the Privacy Protection Law takes effect
The biggest privacy reform in decades: enforcement powers and fines for the Privacy Protection Authority, new definitions of "data" and "database controller", a mandatory privacy officer for some bodies and a narrower registration duty. Even a small business with a digital customer list should check what applies.
- Everyone
VAT rises to 18%
The VAT rate rose from 17% to 18% (government decision 1270/2024). Osek murshe businesses charge the new rate; an osek patur does not charge VAT but pays it on expenses.
- Everyone
2% tax on undistributed profits in closely held companies
Amendment 277: a closely held company with accumulated undistributed profits pays an annual 2% surtax on excess profits above a 750,000 ILS shield. It is avoided by distributing 50% of last year's profits or 5% of accumulated profits (for 2025).
- Companies
- · announced December 26, 2024
Credit-point and surtax-threshold indexation frozen for 2025–2027
The Economic Efficiency Law froze CPI indexation of the credit point (242 ILS a month, unchanged in 2027) and of the surtax threshold (721,560 ILS a year) for three years, eroding the benefits in real terms as wages rise.
- Employees
- Self-employed
- Credit point (monthly)
- now 242 ₪
- Source: לוח ניכויים 2026 – חוק ההתייעלות (הקפאת עדכוני מס ומס יסף) 26.12.2024
Additional 2% surtax on capital income
On top of the regular 3% surtax, capital income (capital gains, dividends, interest, real-estate gains) of individuals above the threshold carries an extra 2%. Relevant to controlling shareholders drawing dividends and to investors.
- Everyone
Allocation-number threshold drops to 20,000 ILS
Second stage of Israel Invoices: allocation numbers are required on tax invoices from 20,000 ILS before VAT.
- Self-employed
- Companies
2024
Israel Invoices: allocation numbers required on large invoices
The Israel Invoices model goes live: an osek murshe must obtain a VAT allocation number for every tax invoice above 25,000 ILS before VAT, or the customer cannot deduct the input VAT. The threshold drops in stages over the following years.
- Self-employed
- Companies
Services:BookkeepingThe "micro business" track comes into force
Self-employed with turnover under the osek patur ceiling can opt into a simplified track: a flat 30% of income counts as expenses without receipts, a short annual filing and no routine capital statement. The choice is made via a tax coordination by 31 December.
- Self-employed
- Osek patur
This timeline collects the changes relevant to the firm's clients and is not an exhaustive list of tax legislation. Accurate as of the verification date; not a substitute for personal advice.
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