Accountant for employees

Our firm specializes in providing accounting and taxation services to employees

Our firm, Simon Accountancy and Economic Consulting, specializes in providing accounting and taxation services to employees. Our firm assists in effective tax calculations for employees, submitting annual reports and handling tax and financial aspects.

Annual Report for Employees – Introduction

Submitting an annual personal report is an obligation derived by virtue of section 131 of the Income Tax Ordinance. There is a common erroneous opinion that the obligation to report is imposed only on the self-employed public, and salaried employees are not completely obligated to report. This assumption is erroneous, employees may be required to report if they meet the provisions of the Income Tax Ordinance. However, the Income Tax Regulations (Exemption from Filing Accountability), 5748-1988 determine the exact amounts and cases in which an employee must submit an annual report to the Income Tax Authority. The amounts are updated each year according to market fluctuations (indices, etc.).

The following are examples of types of employees who are required to report annually, of course only when they are obligated:

High-tech workers

Our firm represents quite a few senior Israeli high-tech executives, entrepreneurs of large companies, partners in venture capital funds, partners in private equity and senior employees who earn high salaries. Many times the annual salary of such employees is very high and requires strict attention to benefit our customers. In addition, many high-tech workers are required to submit an annual report because they exceed the annual salary threshold.

Those with additional income

In the Income Tax Ordinance and the regulations mentioned above, there are additional reporting requirements when a person exceeds the reporting threshold regarding types of income such as: rent, additional income, foreign income, income from foreign allowances, income from the sale of securities, interest income, controlling employees, and more. Therefore, if this case is relevant to you you are welcome to contact us and we will take care to maximize your situation.

Non-residents

Foreign residents are often required to report to the Income Tax if and when income in Israel derives from properties they own, our firm handles many clients who have real estate or other assets in Israel and are required to report.

Controlling employees

Employees with controlling interests pursuant to section 32(9) of the Income Tax Ordinance are also required to submit an annual report.

Top athletes

If you are a top athlete in sports, whether Olympic or playing in senior leagues in various sports and ball, you may well need to submit an annual report to the Tax Authority. The reasons for this can be varied: income from various sources, annual high income, sponsors, sponsorships, etc. Our firm represents athletes from various sports and knows the typical incomes of athletes, we have extensive knowledge and experience to maximize the rights of our athletes.

Rental income holders

There are quite a few salaried employees who own a real estate property that yields them annual income, in some cases this income requires submitting an annual report. We will help you understand the best and most suitable tax track for you so that your situation will be the best and you will not be overtaxed.

Tax returns

Our firm helps employees return overpaid tax money to the tax authorities, the reasons for overpaying can be varied. We got to return a lot of money to our client and sometimes we were even amazed at the amounts our customers received back.

Which employees must report and submit an annual report?

The obligation to submit personal annual reports is derived from section 131 of the Income TaxOrdinance and the regulations enacted thereafter, the Income Tax Regulations (Exemption from Filing Accountability), 5748-1988. It should be taken into account that every year the amounts are updated so that it is necessary to pay attention to whether you exceed the reporting threshold and you must report or whether you are exempt. The following is a list of cases in which there is a reporting obligation pursuant to section 131 of the Income Tax Ordinance, this list is not comprehensive but we have selected the more common cases:

An individual resident of Israel who is under the age of 18 at the beginning of the tax year, if he had taxable income of more than 84,240 in that tax year 2022.
A non-resident individual who had taxable income in the tax year.
A person who in the tax year sold an interest in real estate or performed an action in an association, as defined in the Real Estate Tax Law, which is not exempt from tax under this Law, and has not paid capital gains tax at the maximum rate applicable under the Real Estate Tax Law on the real betterment arising from the sale or action, as the case may be.
A controlling shareholder as defined in section 75B, in a foreign occupation company, as defined in section 5, or in a foreign controlled company, as defined in section 75B.
A person who has done an action determined under subsection (g) to be required to be reported
An individual resident of Israel who transferred, during the course of 12 months, funds outside of Israel in a total amount of NIS 500,000 or more (hereinafter: an amount to be reported); A report pursuant to this paragraph shall be submitted for the year in which the amount for reporting, in whole or in part, was transferred for the first time outside of Israel and for the following year;
Any person so requested by the Assessing Officer is not even required to file a report under this subsection.

Below is a table that summarizes the reporting threshold in the most common cases according to our experience:

Foreign income,

Type of income	year 2022
Salary and rental income	700,000
Additional Income	363,000
income from foreign allowances	363,000
Interest income	693,000
Income from the sale of securities	2,719,000
Salary income	663,240
Employees with control as stated in section 32(9) of the Ordinance