UTC:
Capital City:
Language:
Population:
Currency:
Country Code:
Domain:
-4, -12, +10, +11
Washington, DC
English
336 million
US Dollar (USD)
+1
.us
According to the nonpartisan Joint Committee on Taxation, the global tax deal, aiming to redistribute profits from major multinational corporations, could lead to an annual loss of US revenue ranging from $100 million to $4.4 billion. This global deal, which was agreed upon by over 140 countries in 2021, comprises Pillar One, reallocating profits to market jurisdictions, and Pillar Two, establishing a 15% global minimum tax. Pillar Two has been enacted in numerous countries, but Pillar One remains pending. The committee's analysis, released ahead of a House Ways and Means subcommittee hearing, presents three simulations, indicating a projecting of $1.4 billion loss. Concerns are presented over Pillar One provisions, with bipartisan opposition to the deal's aim of eliminating digital services taxes (DST), potentially impacting global GDP. DSTs, imposed by countries on large digital companies, prompted tariff threats from the US. Canada is proceeding with its DST plans, despite the agreement to delay implementation. The finalized treaty is expected this spring, with an extension granted to some countries to retain their DSTs until June.
For about the past 75 years, the relationship between the United States and Israel has been strengthened through multiple avenues. One area where Israel and the United States continue to aid each other is their respected economies. The United States and Israel have numerous programs which each of their economies thrive such as: the Binational Agricultural Research and Development Foundation, Binational Industrial Research and Development Foundation, U.S.-Israeli Education Foundation, and Binational Science Foundation. These programs suggest that both countries focus heavily on growing their technology and scientific sectors which are a core piece of both economies.
Moreover, these strong economic ties between the countries are rapidly growing; the United States is Israel’s top trading partner, in addition, in the first half of 2023, Israeli exports to the United States increased by 23%. In addition, Israel ranks as the 23 rd largest good trading partner for the United States and the United States ranks accounts for $18.7 billion in Israeli exports which is approximately 25% of their total exports.
Nonetheless, their relationship stems past economics; the United States and Israel have multiple programs to connect on an educational and cultural level. Famous programs such as: Fulbright, International Visitor Leadership Program (IVLP), and English Access all play a pivotal role in connecting the two countries and strengthening their relationship even further.
Address: 3514 International Drive N.W. Washington D.C. 20008
Phone: 202-364-5500
Website: Click Here
Email: consular@washington.mfa.gov.il
Address: 14 David Flusser, Jerusalem 9378322, Israel
Phone: 02-630-4000
Website: Click Here
E-mail: JerusalemACS@state.gov
The United States has one of the strongest economies in the world. After World War II, the United States economy has, for the most part, steadily flourished. Between the years 2020-2023, despite the covid pandemic, the economic output of the USA was estimated at a value of approximately 103 trillion dollars. In addition, the United States’ GDP ranks 1st in the world at $23.3 trillion as of 2023 and 9th in GDP per capita.
The United States’ economy is able to thrive due to the country’s skilled workforce, stable political system, and overall innovative mindset. In addition, the United States leverages both the Atlantic and Pacific oceans for worldwide trade which is a major advantage for cost efficient shipping. Some of the leading economic sectors include Healthcare, Technology, Construction, Retail, Non-durable Manufacturing, and Agriculture.
A bilateral tax treaty on avoidance of double taxation is an agreement signed between two countries aimed at avoiding double taxation and promoting economic cooperation between the two countries. The convention establishes rules for the taxation of various types of income, including dividends, interest, royalties, and capital gains. It also provides mechanisms for resolving disputes and exchanging information between tax authorities of the United States and Israel.
The bilateral tax treaty between the United States and Israel was signed on the 20 th of November 1975 and went into force on the 1 st of January 1995.
To read the agreement in English click here.
The Multilateral Agreement (MLI) is an automatic mechanism for modifying bilateral tax treaties. To apply it, both countries must sign the multilateral agreement and ratify its application in their domestic law.
While Israel signed the MIL in 2017 and the agreement went into force in 2019, the United States hasn’t signed the MLI.
According to the tax treaty between the United States and Israel, the criteria for determining the residency of an individual for tax purposes are as follows:
To read about how an individual is considered a tax resident of Israel, click here.
Under the US domestic law, an entity will be considered a tax resident if it is incorporated under the laws of the United States
According to the domestic law in Israel, an entity will be considered a tax resident if it is incorporated according to the laws of Israel or if the entity was incorporated outside of Israel, but the control and management of the entity is carried out from Israel.
According to the tax treaty between the United States and Israel in the event that, according to the internal tax laws of both of the countries the entity is considered a tax resident of that country, the countries must reach a mutual agreements regarding the entity’s country of residence.
To learn about how a company is considered a resident of Israel click here.
The United States Tax Authority is called Internal Revenue Service (IRS).
Income taxation: 10% – 37%
Taxation of companies and branches: 30%/21%
VAT: there is no VAT in the US but there is sales tax which is very similar, the range of the sales tax is 2.9%-7.25%
Capital gains tax: 0%, 15%, or 20%
United States Internal Tax Rate
Israel Internal Tax Rate
Treaty Withholding Tax Rate
Personal Income tax (Tax brackets)
· $10,276 to $41,775=12%
· $41,776 to $89,075=22%
· $89,076 to $170,050=24%
· $170,051 to $215,950=32%
· $215,951 to $539,900=35%
Corporate tax
Capital gains tax rate
25%-30% (plus exceptional income tax for high earners at 3%)
Branch tax
Withholding tax
(Non-Resident)
Dividends
Interest
Royalties
VAT
2.9%-7.25% (Sales Tax)
Inheritance Tax
There is no federal inheritance tax in the United States, however there are 6 states that impose a state inheritance tax (Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania). This tax ranges from only 1% up to 16% in certain states.
Additionally, there is a federal estate tax ranging from 18 to 40%, and some states have an estate tax on the state level.
The United States is the home to the largest Jewish population in the world, outside of Israel, with notable communities in central places like New York City, Los Angeles, South Florida, San Francisc and more. There are numerous Jewish organizations, community centers and synagogues all throughout the US.
A lot of people across the globe want to move to the US, this is due to the opportunities it offers. From abundant chances for career growth to the ability to explore diverse industries and work with globally leading companies. This, among others, allows the US to attract talented individuals from all over the world.
Additionally, the United States provides a relatively high standard of living, including access to quality education, healthcare, and social benefits.
Relocating to the United States involves navigating several immigration processes and requirements. One common path is obtaining an employment-based visa, where individuals with specialized skills or job offers from U.S. employers may qualify for visa categories such as H-1B or L-1. Alternatively, individuals may explore options such as family-based visas, investment-based visas like the EB-5, or pursuing higher education in the U.S. and seeking work opportunities afterward.
Real estate taxation in the United States is rather complex due to the nature of state governments. Some of the real estate taxation factors include:
Property Tax: Property Tax: Property tax is imposed on both immovable assets, such as land and buildings, and movable assets, including vehicles and business equipment. This tax is predominantly governed and enforced at the local level, which results in considerable differences in tax rates, valuations, and regulations across various jurisdictions, including states, counties, cities, and school districts. Each local government establishes its own tax policies, which encompass tax rates, methods of assessment, and available exemptions..
Rental Income Taxation: Rental income is taxed as regular income and must be reported on an individual’s tax return. Certain related expenses may be deductible from this income.
In the United States, there are several types of business entities that individuals or groups can choose from when starting a business. The most common types of business entities include:
According to section 170(a) of the Israeli income tax ordinance, any transfer of payment to a non-Israeli resident is subject to 25% of withholding tax. The tax authority can allow, under certain circumstances, to reduce or dismiss the withholding tax. Our firm handles withholding tax matters with the Israeli Tax Authority.
Due to the fact that both countries have a tax treaty with each other, one can submit a declaration form (2513/2 form – Statement regarding a payment to a foreign resident that is exempt from withholding tax), and under certain circumstances, there is a possibility to transfer the payment without the withholding tax and the approval of the Tax Authority.
In providing advice regarding the transfer of money abroad, in addition to the issue of withholding tax, our office handles the requirements of the foreign banks, such as an accountant’s approval regarding the payment of taxes and examines additional actions required in light of the uniform standard of CRS between the countries – automatic exchange of information between countries which is carried out first through the banks and then between the tax authorities of each two countries.
The banks raise many difficulties and charge high fees for converting shekels into other currencies, so it is important to consult before transferring the funds – Contact us.
For more information on money transfers abroad, click here.
In the United States, there are several incentive laws and provisions aimed at encouraging international business activities and reducing the tax burden on certain international transactions. Some of the key incentive laws related to international taxes include:
