Taxation of Income in Israel and the West Bank

The State of Israel taxes the income of both its citizens and the residents of the West Bank that it has occupied since the 1967 War. The tax law that is used as a basis for the taxation of the income of its citizens is different from that used to tax the income of the residents of the West Bank. The purpose of this paper is to examine the two different tax laws that are used by the State of Israel to generate income and to attempt to assess the relative impact that these laws have on the taxpayers. The Income Tax Ordinance passed by Israel's Knesset is applicable to any person who earns income in the State of Israel, in annexed East Jerusalem, or in the Israeli settlements in the territories occupied by Israel since the 1967 War. Prior to the war, the income of the residents of the West Bank was taxed by the Kingdom of Jordan based on the Jordanian Income Tax Law of 1964. When Israel occupied the West Bank after the war, it retained the Jordanian tax law that had been in effect prior to the war. The Tax Law of 1964 is currently used as the basis for taxing the income of persons who earn their income in the West Bank. The major exception to this is those Israeli citizens who live in Israeli settlements on the West Bank. As stated earlier

Dividend tax · Double taxation · Economic policy · Economics · Economy · Geography · Gross income · Human settlement · Income tax · Political science · State (computer science · State income tax · Tax reform · Fiscal Policy and Economic Growth · Law · Taxation and Compliance Studies

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