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Israel

The modern state of Israel is a small country at the crossroads of Europe, Asia and Africa that maintains important political and economic ties with North America. The legal system is based on Anglo-American traditions. Israel has been independent since 1948. The official capital is Jerusalem. The country’s Jewish population is currently 5.5 million, while the Arab population totals 1.5 million.

STEP Israel branch page

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New developments
  • New taxation of trusts law has been in force since 2006. In appropriate cases, it provides broad tax exemptions respecting trust assets located abroad, income generated on these assets, and distributions to beneficiaries within Israel. Some (or all) of the trustees may be resident in Israel. Appropriate regulations and forms have recently been published.
  • Tax benefits for new immigrants and expatriates returning to reside in Israel.
  • Trust reporting obligations for all trusts under the Taxation of Trusts Law commenced in June 2009.

1. Introduction

a. History and background

The modern state of Israel is a small country at the crossroads of Europe, Asia and Africa that maintains important political and economic ties with North America. The legal system is based on Anglo-American traditions. Israel has been independent since 1948. The official capital is Jerusalem. The country’s Jewish population is currently 5.5 million, while the Arab population totals 1.5 million.

Israel leads the Middle East region in gross domestic product, per capita income, high-tech industry, technology transfer and telecommunications.

The currency is the New Israeli shekel (NIS).

b. Legal system

The history of Israeli law reflects the history of the country in modern times. Under Ottoman rule from 1516-1917, the law applied was a mixture of Muslim and continental law. During the years 1917-1948, the country was ruled by the British under a League of Nations mandate. The British were reluctant to make sweeping changes to the legal system of a territory that was not a true British colony. Nonetheless, through the King’s Order in Council of 1922, the English legal system was made available to the country.

Since 1948, Israel has enacted its own laws. The influence of English law can still be felt. Most of Ottoman law has been abandoned. While legal developments in England and the US are followed and regarded with deference, Israeli courts are not bound by them and have begun creating their own precedents and doctrines, constituting an independent Israeli ‘common law’. Today, the bulk of Israeli law is legislation passed by the Knesset (Parliament). Noteworthy, however, is that personal status is governed according to religious law. All Jews are subject to the personal law of the Jewish religion, while Muslims and Christians are subject to the laws of their religions respectively.

The highest judicial body is the Supreme Court. While Israel does not have a formal written constitution, 11 Basic Laws serve this purpose.

Editorial board
Lyat Eyal TEP
Alon Kaplan Law Firm, Tel-Aviv, Israel
Leon Harris TEP
Harris Consulting & Fiduciary Specialists, Tel Aviv, Israel
Alon Kaplan TEP
Alon Kaplan Law Firm, Tel Aviv, Israel
Meir Linzen TEP
Herzog, Fox, Neeman, Tel Aviv, Israel
Dr Zvi Tamir TEP
Zvi Tamir & Co, Tel Aviv, Israel

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