The Association for Americans and Canadians in Israel (AACI), which has been working hard to ensure that the new tax reforms not cause undue damage to olim (immigrants) and aliyah (immigration), has received a report on the topic written by Atty. Yitzchak Heimowitz. Following are excerpts from his report, written in the framework of his efforts on behalf of the Council of Immigrant Associations:
\"The Tax Reform Bill was adopted by the Knesset on July 24, 2002 by an overwhelming vote... Prior to that... the [new immigrants\' proposed amendments], submitted by representatives of the National Religious Party and Yisrael B’Aliyah, received a tie vote of 35-35. It thus did not pass.
\"[Here are] some of the highlights of the law:
\"Passive Income. We had demanded a 10-year exemption period for new Olim and veterans. The Treasury agreed to increase the five-year period they originally provided for the new Olim to seven years (from date of Aliyah) and to provide a one-year period for veteran Olim (from the effective date of the Law). It is not yet clear how inclusive their interpretation of veteran Olim will be.
\"Pensions. Our demand to specify that the treatment of pensions would cover all retirement income was defeated by the 35-35 tie vote. However, the Income Tax Commissioner has given newspaper interviews indicating that she will give a broad interpretation to the Law so that self-employed individual retirement plans will be included as well as traditional pensions... An unexpected benefit was received from another direction: ... All pensioners will be exempt on the first NIS 5,000 of their income per month. In addition they will be exempt from tax on any rental income, which they receive... Persons who receive Social Security benefits are not taxed on them in Israel due to the American-Israel Tax Treaty. For the same reason U.S. government pensions and state or municipal pensions are not taxed...\"
Heimowitz plans a more detailed report in the near future.
\"The Tax Reform Bill was adopted by the Knesset on July 24, 2002 by an overwhelming vote... Prior to that... the [new immigrants\' proposed amendments], submitted by representatives of the National Religious Party and Yisrael B’Aliyah, received a tie vote of 35-35. It thus did not pass.
\"[Here are] some of the highlights of the law:
\"Passive Income. We had demanded a 10-year exemption period for new Olim and veterans. The Treasury agreed to increase the five-year period they originally provided for the new Olim to seven years (from date of Aliyah) and to provide a one-year period for veteran Olim (from the effective date of the Law). It is not yet clear how inclusive their interpretation of veteran Olim will be.
\"Pensions. Our demand to specify that the treatment of pensions would cover all retirement income was defeated by the 35-35 tie vote. However, the Income Tax Commissioner has given newspaper interviews indicating that she will give a broad interpretation to the Law so that self-employed individual retirement plans will be included as well as traditional pensions... An unexpected benefit was received from another direction: ... All pensioners will be exempt on the first NIS 5,000 of their income per month. In addition they will be exempt from tax on any rental income, which they receive... Persons who receive Social Security benefits are not taxed on them in Israel due to the American-Israel Tax Treaty. For the same reason U.S. government pensions and state or municipal pensions are not taxed...\"
Heimowitz plans a more detailed report in the near future.