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Israel is a signatory on double taxation conventions with several countries, including the UK. The purpose of the conventions is, among other things, to address the issue of potential double taxation of income and of pensions.

An individual can be a tax resident in more than one country. According to Israeli law, foreign income of Israeli residents must be reported in Israel and is subject to Israeli taxes.

However, if tax has been withheld from the income in the receiving country, that tax is deducted from the total tax owing under Israeli law; the Israeli resident is only responsible for payment in Israel of the remaining tax amount due.

The method of avoiding double taxation, utilised by the Israeli Tax Authority, is through the granting of a tax credit to an Israeli resident payor of foreign income tax paid on income from foreign sources, for such income that would be taxable under the Israeli income tax regime. No tax credit is provided for foreign taxes paid on income that would be tax exempt under Israeli law. The maximum