Often, the amount of tax that a salaried employee pays automatically through the paycheck is higher than what is required by law, and can sometimes be significantly reduced.

In most cases, the reason for this is that the tax on the pay slip is calculated on a monthly basis. However, the final tax calculation is done on an annual basis and in respect of all credits and deductions that are also permitted to salaried employees.

A tax refund is payable to anyone who paid excess income tax during the year. The tax amount is examined at the end of the tax year, and then compared to the total tax actually paid by the person.

The most common cases in which a salaried employee is entitled to a tax refund are:

  • Part-time work during the year (due to unemployment, unpaid leave, exchange of jobs and other cases of part-time work).
  • Replacement of a place of work or employer during the year, without performing tax coordination.
  • Work abroad while working in Israel during the year.
  • Medical problems of the worker or his family.
  • Change in personal status such as marriage, childbirth, divorce, maintenance payments, etc.
  • Move to a national priority area (development towns, the Galilee, the Golan Heights, the Negev, etc.).
  • New immigrants during the first three years in Israel are eligible for tax refunds.
  • Discharged soldiers for two years from the date of completing their compulsory service.
  • Deposits to a pension fund, a provident fund, a safe life independently, for a salary without social benefits.
·         Those who completed their Bachelor’s degree or received a teaching certificate from 2005.
·         Those who donated over NIS 180 to organizations subject to section 46.
The statute of limitations and the time limit for submission of income tax refunds and the receipt of tax refunds is up to 6 years from the end of the tax year for which a report on income was submitted.
Receipt of tax refunds from the Income Tax Authority requires knowledge of the Tax Ordinance and experience in the bureaucracy of the Income Tax offices. In order to receive the maximum tax refund, the reasons for eligibility must be examined and the application must be submitted in a professional and legal manner. Professional testing ensures the maximum possible tax refund.
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