Self-Employed Working from Home
Self-employed individuals who work from home can deduct a proportional share of home expenses: rent, electricity, internet, water, and arnona (property tax). The proportion is based on the ratio of the work space to total apartment size. For example, a 15 sqm office in a 100 sqm apartment = 15% of home expenses are deductible.
Employees Working from Home
Employees generally cannot deduct home office expenses – the employer is responsible for providing work tools. Some employers provide a stipend for home office expenses, which may be partially taxable. There is no specific Israeli legislation addressing employee home office deductions.
International Remote Work
Israeli residents working remotely for foreign employers while physically in Israel are taxed on all income in Israel. The foreign employer may need to register as an employer in Israel or engage a local payroll provider. Conversely, Israeli employees working remotely from abroad may create a permanent establishment for their Israeli employer in the foreign country.
בסיס חוקי
- Section 17 – Business expense deduction
- Section 2(2) – Employment income
Important Note: The information on this website is for general informational purposes only and does not constitute professional tax advice. Consult a qualified tax advisor before making financial decisions.