How corporate tax works in Israel
Israel taxes resident companies on worldwide income at 23%, unchanged since 2018. There is no local corporate surcharge.
Preferred enterprises pay 16% centrally or 7.5% in development areas; preferred tech enterprises pay 12% or 7.5% on IP income with research conditions and certificates. Special tech groups above ILS 10 billion reach 6% anywhere.
Multinationals above EUR 750 million face a 15% qualified domestic minimum top-up for years from January 2026. Inter-company dividends are generally exempt.
Tax rates at a glance
- Standard rate
- 23%Flat
- Preferred centre
- 16%
- Preferred tech
- 12%
- Area A rate
- 7.50%
- Giant IP rate
- 6%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FoundersHolding companiesRegional operatorsInvestorsCross-border groups
Watch out for
- Preferred rates need certificates, research spending and IP conditions. Assuming 7.5% without Innovation Authority approval is a costly error.
- Dividends from preferred income carry their own 20% or 4% withholding lanes. Company-level relief does not automatically flow to shareholders.
- The 2026 top-up is new compliance for large groups. In-scope multinationals need systems for domestic minimum calculation from day one.
- Salary-heavy founders face the personal side too. A 23% company rate beside 50% top salary tax makes approved-enterprise dividends central.
Frequently asked questions
Does Israel have corporate tax?
Yes, 23% standard with preferred lanes of 16%, 12%, 7.5% and 6% for qualifying enterprises and tech groups.
What is the tech company rate in Israel?
Preferred tech enterprises pay 12% centrally or 7.5% in development areas on IP income, and giant groups can reach 6%.
Does Pillar Two apply in Israel?
Yes, as a 15% qualified domestic minimum top-up for large multinationals from tax years starting January 2026.