Number of Israelis paying NIS 1m capital gains tax doubles

• Published date: 03 August 2022
• Publication title: Globes (Rishon LeZion, Israel)

In 2021, a record 562 Israelis paid more than NIS 1 million each in taxes for income from capital gains. As the tax rate for capital gains is 25%-30%, this would mean that those Israelis would have earned at least NIS 3.5 million each from capital gains, before tax

According to Adv. Itay Bracha, managing partner and head of the banking and taxation department of the Bracha & Co. law firm, this completely reflects the situation in Israel's tech sector last year. "Many employees received options and their company raised money for astronomical valuations and they became millionaires."

Bracha explains that the overall sum paid by those 562 Israelis was well over NIS 5 billion, huge revenues for the state, and many of these wealthy people paid tens of millions in capital gains. On average the amount made on capital gains was about NIS 25 million, before tax.

Over double previous years

For the sake of comparison, in 2020 the number of Israelis who paid over NIS 1 million in capital gains to the Tax Authority was 260, up from 224 in 2019. The Israel Tax Authority describes 2021 as exceptional and predicts that in 2022 we will return to much lower levels, resembling previous years.

The Israel Tax Authority wrote, "The enormous increase in revenues stems from the proliferation of investments of high sums, mainly in high-tech companies, which began in the...