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The Year 2023 Has Begun- What Must Be Done?

The Year 2023 Has Begun- What Must Be Done?

** The information and advice in this notice are for general discussion purposes only. The provisions of the law on these subjects are more complex than those detailed in this article. For more information regarding your personal situation, you should contact us for an individual consultation. **


Dear Clients and Friends,

We wanted to update you regarding three matters that should be addressed at the beginning of 2023.



As a result of the increase in the linkage during 2022 of more than 5%, tax brackets were updated such that during 2022 we will pay less taxes on our income:

10% 6,790 6,790 81,480
14% 2,940 9,730 116,760
20% 5,890 15,620 187,440
31% 6,090 21,710 260,520
35% 23,470 45,180 542,160
47% Every additional NIS Every additional NIS Every additional NIS


  • The tax exemption for rental income was updated to NIS5,470
  • The ceiling for annual severance increased to NIS13,310
  • The base allowance for senior citizens – NIS2,520
  • The income ceiling for limitation of the senior citizens allowance – NIS8,719


Exempt dealers are required to declare their turnover (personal income without deduction for expense) for 2022 until 31.1.2023.  To make the declaration click here.


As long as there is an expected tax liability it is recommended to pay the estimated payment on calculation of the expected tax.  As and when you are interested, we will calculate for you estimated tax- please contact to us and we will be happy to assist.

Payment of Estimated Taxes


2023 has arrived and the Tax Authority has already opened their system for making the tax coordination for 2023. What is a tax coordination?  Who is obligated to make a tax coordination? What are the different methods of making the tax coordination?

Answers to these and other questions are in this article.

What is a tax coordination?

A declaration by you to the Tax Authority of your expected annual income and / or requested tax benefits for the purpose of calculating your annual tax.

Once the tax coordination has been made and approved by the ITA, you must show the ITA’s certificate of approval to each of your employers / pension payers.

Who should make a tax coordination?

  • Employees with multiple sources of income
  • Employees with multiple employers
  • A pensioner who receives a tax exemption from his pension (after applying for a permanent tax exemption rate (קיבוע זכויות)) or a pensioner who has several sources of income (including from income spreading over prior years)
  • A person who wishes to receive an exemption / relief in the calculation of his tax for various reasons such as donations, personal credit points, etc.
  • And other reasons

Why is a tax coordination required?

In order for the Payor (employer or pension payer) to know how to deduct tax correctly considering all of the Payee’s (employee or pensioner) income / exemptions, the Payee needs to obtain a withholding tax deduction certificate from the ITA.  This certificate is received after making the tax coordination, and the Payee needs to forward it to the Payor (employer / pension payer).

What is ITA Form 101 and how is it related to your tax coordination?

In this form, the employee / pensioner declares his or her marital status, entitlement to special credit points and whether he or she has additional income from other sources.

Every employee / pensioner is required to fill out this form in order to notify the employer / pension fund. Failure to fill out this form will result in a maximum tax withholding by the employer / pension fund.

If one has additional income, in order to avoid maximum income tax withholding, Form 101 together with the ITA withholding tax deduction certificate must be submitted to the employer / pension fund.

To see Form 101, click here.

To see Form 101C for retirees, click here.

What are the consequences of not making a tax coordination?

Failure to make a tax coordination will result in the Payor having to withhold maximum income tax on pay slips / pension payments retroactively from the beginning of the year.

Alternatively, completion of Form 101 without a tax coordination can result in double tax benefits in violation of the law and lead to significant future liabilities to the ITA.

What is the difference between an application for a tax refund and a tax coordination?

A tax coordination is made for the current tax year (for i.e., tax year 2023 during 2023) and the withholding tax deduction certificate that is then obtained is conveyed to the employer who deducts tax / refunds tax that was already paid accordingly.

An application for a tax refund is for years that have already passed (for example, for years 2020, 2019, etc.) regarding all the years’ income for the family unit. Tax refund applications can be submitted up to 6 years back.

If you worked for part of the year, had losses from securities, worked in several jobs or had special expenses and did not file a tax return – you should check your eligibility for a tax refund from the ITA. You can contact our office regarding this issue.

In some cases, such as if you earn income from abroad, have an investment in an LLC or have high income, an annual tax return must be submitted in any case. Failure to submit a tax return in these cases constitutes a violation of the tax law. Please contact our office for more details.

Do pension recipients need to make a tax coordination?

Generally speaking yes, but in some cases the ITA will automatically extend last year’s tax coordination. If you received a notification in the mail about the extension of a tax exemption and there has been no change in your income, there is no obligation to make a new tax coordination until expiration of your exemption.

If you did not receive an automatic extension notification, and in the past, you have received a tax exemption from the pension by applying for a permanent tax exemption rate (קיבוע זכויות), in order to continue receiving the exemption, a tax coordination should be made.

If you have never received an exemption for your pension, you are welcome to contact us for assistance.

If you have reached the age of eligibility (62 for a woman or 67 for a man) and are continuing to work, you are welcome to contact us to find out how to continue working and at the same time receiving a pension with tax benefits.


How to make a tax coordination?

  • Through the ITA tax coordination system:

To make an online tax coordination click here. Please note that in some situations no tax coordination can be made through this option.

To view a tutorial click here.

  • In certain instances no tax coordination can be made through the ITA system but can be done by going in person to the local ITA office, or to turn to us for further guidance.

If you are interested in making a tax coordination through our office, please contact us and we will be happy to assist you.

Have a Happy and Healthy New Year,

Deutsch & Company

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