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As part of the disclosures required in the tax return, anyone who is considered a controlling shareholder in a non-Israeli company must complete form 150, and attach it to the tax return.
A controlling shareholder is someone who, directly or indirectly, owns at least 10% of the rights of the company (e.g. shares, voting rights etc.). Furthermore, in determining the percentage of ownership, the percentages owned by first-degree relatives are also taken into account.
The purpose of the form is to inform the tax authority of the existence of the company, as well as the approach that has been taken in terms of tax treatment in Israel. The information is of course designed to allow the tax authorities to make their own assessment, and potentially disagree with the approach.
The form has room for details of 2 companies. Of course, if there are more companies, extra forms should be completed.
The first part of the form contains some basic details of the company - name (Hebrew and original language), registration number and the country in which the company was incorporated.
The next question relates to the country of residence of the country, which could be different to the country in which the company was incorporated. This relates back to the issue of "control and management" of the company - see here for more.
The next question relates to the office (registered) address of the company, and then the form asks for the date that the shareholder acquired their share(s) in the company.
The following questions asks whether the income of the company is treated - for tax purposes in the country of residence of the company - as see-through to the shareholders (e.g. the LLC in USA - see here for more), or "regular," i.e. belonging to the company itself. If the former, an election can be made in Israel to treat the income in a similar fashion.
The next question relates to the correspondence address of the company, followed by email address and telephone & fax numbers. The final question in this section relates to an identity number given by the Israeli authorities to this company.
The bottom set of questions relate primarily to the activities of the company.
The first question asks for a short description of the business activity of the company.
The next two questions ask whether the majority of the income of the company is derived from passive income (e.g. interest, dividends, rental etc.), and - if so - whether the company meets the definition of a Controlled Foreign Company.
The following two questions deal with whether the majority of the income of the company is derived from a "Special Profession", and - if so - whether the company meets the definition of a Foreign Professional Company.
The next question asks whether the shares of the company are publically traded, and the final question asks whether there are any persons who manage the company or a directors of the company who are Israeli residents. This of course gives rise to the question of the company being "controlled and managed" from Israel, with all of the potential repercussions.
The bottom section of the form requests information regarding the percentage holding of the tax payer - both ordinary shares and other rights, according to various rights that the shares/rights will give them (profits, votes etc.). The percentages requested are the year-end percentages, and the highest during the tax year.
This is an extremely important form to get right, and if in doubt - I strongly recommend asking a professional for assistance.
27 January 2015
6 January 2015
Form 101 - 2015 version
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As previously discussed, all employees are required to fill in form 101 for each place of employment, and give it to the person in charge of the salaries. Technically, this needs to be filled in on the 1st of January (for continuing jobs), but for practical reasons it’s sufficient to have it filled out before the January salary is processed.
If your employer doesn’t give you one, you can download a blank form from the tax office here.
Below is a short guide to filling in the form for the 2015 tax year.
Section א
Employer’s details – to be filled in by them
Section ב
Employee’s basic details – should be reasonably self-explanatory
Section ג
Children under 18 – relates to any child born in 1997 or later. There’s space for 13 children, which should be enough!
Column 1 is to be ticked if child is under your supervision (i.e. they live with you).
Column 2 is to be ticked if you get child support from Bituach Leumi for this child. I assume this should be ticked by mothers or single fathers only.
Column 3 – child’s name
Column 4 – child’s ID number
Column 5 – child's date of birth
Columns 3, 4, 5 should all be supported by the appendix to your ID card.
Section ד
Details of income from this employer
In the first box, tick the appropriate detail. Most likely you will be getting משכורת חודש (monthly salary) or קיצבה (pension). Refer to the notes at the bottom of page 2 if you are unsure.
Under תאריך תחילה put the later of 01/01/2015 and your first day of employment with this employer.
Section ה
Details of other income
This is probably the most important section of the form. It is imperative not to make a mistake here, especially if you have more than one employer.
If you have only one employment, tick the very top box (in its own section), and move on.
Otherwise, tick the second box down, and then tick the type of other income that you have (as per section ד). You will then need to tick as follows:
First box – if you wish this employer to be your “main” employer (i.e. they treat your salary as if it’s the only one that you get – generally the payer who is likely to pay you the most during the year), tick this, and move on.
Second box – if this employer is not your “main” employer, tick this. If you do not present your employer with a Teum Mas (see here for further discussion), you will have tax deducted at 48% - you have been warned.
Third box – if you have a Keren Hishtalmut with your “main” or another employer, only tick this if you are being fully taxed on the employer contributions (if in doubt, do not tick). See here for further discussion on this subject.
Fourth box – if you have a pension fund and/or disability insurance with your “main” or another employer, only tick this if you are being fully taxed on the employer contributions (if in doubt, do not tick). See here for further discussion on this subject.
If you have more than one employer, I strongly suggest seeking help in filling this section out.
Section ו
Spouse’s details – Reasonably self-explanatory. Of course, only relevant if you’re married.
Section ז
Changes during tax year – Most likely the birth of a child.
Section ח
Tax credits – Second most important part of the form.
(1) Assuming you are resident in Israel, tick the box
(2) Tick if you are disabled or blind, and have confirmation from the tax office to this effect.
(3) Tick if you and your family live in a “development area” or “special yishuv.” This is not relevant for most people.
(4) Tick if you are an Oleh Chadash / Katin Chozer (made Aliyah in August 2011 or later), or a returning resident (who was non-Israeli resident for at least six years) who came back to Israel between 16 May 2010 and 30 September 2012.
(5) Tick if spouse has no income and you are either disabled/blind (as per (2) above) or have reached Israeli retirement age.
(6) To be ticked by a single parent, provided that they are supervising at least one child and are receiving child benefit from Bituach Leumi for that child.
(7) To be ticked by mothers of children (who live with her) born in 1997 or later, or fathers who meet the criteria in (6) above. Then fill in the number of children who meet the following criteria:
a. Children born in 1997 or 2015
b. Children born between the years of 2010-2014
c. Children born between the years 1996-2009
(8) To be ticked by fathers and mothers who do not meet the criteria in (7) above. Then fill in the number of children who meet the following criteria:
a. Children born in 2012 or 2015
b. Children born in 2013 or 2014
(9) To be ticked if you are supervising a child who only has one parent.
(10) Tick if you are an unmarried parent of a child whom you are not supervising, but are providing monetary support. A court judgment to that effect should be handed to the tax office.
(11) Tick if you are remarried and are paying alimony to the former spouse. Again, a court judgment to that effect should be handed to the tax office.
(12) Tick if you are aged 16 or 17 as of 01/01/2015.
(13) Tick if you have recently finished army or national service. Dates of start and finish should be provided, as well as documentary evidence to that effect.
(14) Tick if you have finished an academic degree and/or professional qualification in prior years. Form 119 needs to be completed as well to ascertain how many credits you are eligible for.
Section ט
Teum Mas – Normally this is not filled in, as you would go straight to the tax office to get a Teum Mas.
Section י
Declaration – date and sign the form.
As previously discussed, all employees are required to fill in form 101 for each place of employment, and give it to the person in charge of the salaries. Technically, this needs to be filled in on the 1st of January (for continuing jobs), but for practical reasons it’s sufficient to have it filled out before the January salary is processed.
If your employer doesn’t give you one, you can download a blank form from the tax office here.
Below is a short guide to filling in the form for the 2015 tax year.
Section א
Employer’s details – to be filled in by them
Section ב
Employee’s basic details – should be reasonably self-explanatory
Section ג
Children under 18 – relates to any child born in 1997 or later. There’s space for 13 children, which should be enough!
Column 1 is to be ticked if child is under your supervision (i.e. they live with you).
Column 2 is to be ticked if you get child support from Bituach Leumi for this child. I assume this should be ticked by mothers or single fathers only.
Column 3 – child’s name
Column 4 – child’s ID number
Column 5 – child's date of birth
Columns 3, 4, 5 should all be supported by the appendix to your ID card.
Section ד
Details of income from this employer
In the first box, tick the appropriate detail. Most likely you will be getting משכורת חודש (monthly salary) or קיצבה (pension). Refer to the notes at the bottom of page 2 if you are unsure.
Under תאריך תחילה put the later of 01/01/2015 and your first day of employment with this employer.
Section ה
Details of other income
This is probably the most important section of the form. It is imperative not to make a mistake here, especially if you have more than one employer.
If you have only one employment, tick the very top box (in its own section), and move on.
Otherwise, tick the second box down, and then tick the type of other income that you have (as per section ד). You will then need to tick as follows:
First box – if you wish this employer to be your “main” employer (i.e. they treat your salary as if it’s the only one that you get – generally the payer who is likely to pay you the most during the year), tick this, and move on.
Second box – if this employer is not your “main” employer, tick this. If you do not present your employer with a Teum Mas (see here for further discussion), you will have tax deducted at 48% - you have been warned.
Third box – if you have a Keren Hishtalmut with your “main” or another employer, only tick this if you are being fully taxed on the employer contributions (if in doubt, do not tick). See here for further discussion on this subject.
Fourth box – if you have a pension fund and/or disability insurance with your “main” or another employer, only tick this if you are being fully taxed on the employer contributions (if in doubt, do not tick). See here for further discussion on this subject.
If you have more than one employer, I strongly suggest seeking help in filling this section out.
Section ו
Spouse’s details – Reasonably self-explanatory. Of course, only relevant if you’re married.
Section ז
Changes during tax year – Most likely the birth of a child.
Section ח
Tax credits – Second most important part of the form.
(1) Assuming you are resident in Israel, tick the box
(2) Tick if you are disabled or blind, and have confirmation from the tax office to this effect.
(3) Tick if you and your family live in a “development area” or “special yishuv.” This is not relevant for most people.
(4) Tick if you are an Oleh Chadash / Katin Chozer (made Aliyah in August 2011 or later), or a returning resident (who was non-Israeli resident for at least six years) who came back to Israel between 16 May 2010 and 30 September 2012.
(5) Tick if spouse has no income and you are either disabled/blind (as per (2) above) or have reached Israeli retirement age.
(6) To be ticked by a single parent, provided that they are supervising at least one child and are receiving child benefit from Bituach Leumi for that child.
(7) To be ticked by mothers of children (who live with her) born in 1997 or later, or fathers who meet the criteria in (6) above. Then fill in the number of children who meet the following criteria:
a. Children born in 1997 or 2015
b. Children born between the years of 2010-2014
c. Children born between the years 1996-2009
(8) To be ticked by fathers and mothers who do not meet the criteria in (7) above. Then fill in the number of children who meet the following criteria:
a. Children born in 2012 or 2015
b. Children born in 2013 or 2014
(9) To be ticked if you are supervising a child who only has one parent.
(10) Tick if you are an unmarried parent of a child whom you are not supervising, but are providing monetary support. A court judgment to that effect should be handed to the tax office.
(11) Tick if you are remarried and are paying alimony to the former spouse. Again, a court judgment to that effect should be handed to the tax office.
(12) Tick if you are aged 16 or 17 as of 01/01/2015.
(13) Tick if you have recently finished army or national service. Dates of start and finish should be provided, as well as documentary evidence to that effect.
(14) Tick if you have finished an academic degree and/or professional qualification in prior years. Form 119 needs to be completed as well to ascertain how many credits you are eligible for.
Section ט
Teum Mas – Normally this is not filled in, as you would go straight to the tax office to get a Teum Mas.
Section י
Declaration – date and sign the form.
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