Individual’s Residence (June 24th, 2008)
1.1"A”was an Israeli tax resident until November 2006. At that time, "A” and
his family left Israel and moved to country "B”, which enjoys a DTT with
1.2"A”and his spouse live in "B” together with their younger son and intend to
return to Israel in a number of years.
1.3During the years 2005-2008, "A” spent 200, 230, 10
and 10 days in Israel respectively.
1.4In his tax return for 2007, "A” reported income
under section 100A of the Israeli Income Tax Ordinance (Exit Tax) when he
ceased being an Israeli Tax Resident.
1.5After moving to "B”, "A” filed tax returns
therein as a resident thereof.
Does "A” come under the aegis
of the definition of an Israeli resident as per section 1 of the Israeli Income
3.1The opinion recommends that "A” abstain form
sojourning in Israel for more that 30 days during 2008 and thus defeat the
arithmetic presumption of residence. Even if the arithmetic presumption was
applicable, other criteria which serve to determine the center of interests in
accordance with Israeli precedents point towards a non-resident tax status of "A”.
Most significant among these are: "A” has no dwelling in Israel; his
family abides with him abroad; and all his activities are carried on abroad.
3.2The opinion also concludes that even if "A” was to
be classified as a resident according to the Israeli law, under the tie breaker
rules of the relevant DTT, "A” would be classified as a resident of "B”
due to the location of his permanent abode therein and due to his closer
personal social and economic affiliation with "B” than with Israel,
which he visits only occasionally.